Mortgages in Retirement
Posted on 3 July 2018 by Mr J Rowe
We are retired and have savings – can we still get a mortgage?
As the state retirement age is creeping closer to 70, most lenders will accept that people are likely to be able to continue working until age 70. That means they can base their affordability calculations on earned income until then. However, if you need the term to go beyond age 70 then those same calculations will have to be based on your potential pension/investment income only. It’s not impossible though and quite a few lenders will nowadays lend to age 85 and in a small number of cases to age 90.
This is going to depend on the value of your property, you deposit and how old you are. It is certainly possible to raise a mortgage when you are aged 55 or older, but the choice of Lender's and type of mortgage are restricted. The final choice will depend on how much you want to borrow, how long you want to borrow it for and your own personal circumstances.
You may be able to arrange an equity release mortgage. With a Lifetime equity release mortgage you would not have to make monthly repayments and the interest is added to the debt until you move home, go into permanent care or die, at which time the debt has to be repaid. Alternatively, you can look at Home Reversion Equity Release mortgages whereby you sell part or all of the property to the mortgage company in return for a lump sum and the right to live in the property as if you still owned it until it needs to be repaid.
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.