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Mortgages For Over 50s

Martha Lott

Written by Reviewed by Emma Lunn

14th Aug 2020 (Last updated on 14th May 2021) 6 minute read

There are many reasons why you might need to get a mortgage after the age of 50. You might be moving house, divorcing, or simply remortgaging. However, over 50s typically face stricter lending criteria, and a shorter repayment period. This means you might not have access to all mortgage deals in the market. 

Compare My Move work with property industry experts to bring you the best advice for moving house, from the cost of buying a house to the best mortgage for you. In this guide, we will explain everything you need to know about getting a mortgage if you’re over 50, from the lending criteria to the types of mortgage. 

This article will cover the following:
  1. Can You Get A Mortgage When You're Over 50?
  2. Where Should I Start My Search?
  3. What Is The Lending Criteria For An Over 50s Mortgage?
  4. How Many Years Mortgage Can You Get At 50?
  5. What Types Of Mortgages Are Available When Over 50?
  6. How Can You Increase Your Chances Of Getting A Mortgage Over 50?
  7. Which Lenders Offer Mortgages For Over 50s?
  8. Learn More About Mortgages and Deposits

Can You Get A Mortgage When You're Over 50?

Rather than set an age limit for when you take out a mortgage, most lenders have an age limit for when the mortgage must be repaid by. This is typically between 70 and 85.

This means that as you get older you might find it more difficult to take out a mortgage over 25 years. For example, if the lender’s age limit is 70 at the end of the term, you’ll need to be 45 or under to get a 25-year mortgage. 

You might also find stricter lending criteria as you get older. If you will be retired during the mortgage term, the lender will want to see proof your mortgage payments are affordable on your pension income. 

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Where Should I Start My Search?

Applying for a mortgage when you are over 50 might affect the deals that are available to you. A mortgage broker will have access to deals from smaller banks and building societies and specialist lenders. A broker can help you compare the different deals available

If you’re moving house, you’ll also need a conveyancer to do the legal work. Don’t forget to compare conveyancing quotes to make sure you get the best deal for your conveyancing process

What Is The Lending Criteria For An Over 50s Mortgage?

As with all mortgages, the lender will run affordability checks to see if you can afford your mortgage payments.

Proving affordability might be more tricky if you plan to stop work during the mortgage term and will be relying on your pension or investment income to pay your mortgage. You should ensure you have evidence of the following before you apply for a mortgage:

Source of Income - Just like a traditional mortgage, you will need to show evidence that you have enough money coming in to pay your mortgage. The lender will also check how reliable your source of income is. If you’re retired, lenders will ask for evidence of an ongoing income such as a pension or investment income.

A Good Credit Score - As always, the better your credit score the more mortgage deals you’ll have to choose from. Check out what credit score you need for a mortgage in our detailed guide. 

How Many Years Mortgage Can You Get At 50?

Getting a mortgage if you are over 50 will typically mean you will have a shorter repayment period. Unlike the usual repayment period of 25 years, getting a mortgage at an older age will mean you’ll have less time to pay it off, depending on your age. Most lenders have an age limit of 70 or 85 for when you need to pay back your mortgage.

Lenders will look at how much of your mortgage will be paid back during your retirement years. If you are 10 years away from retiring with a 25-year term mortgage, lenders will base their affordability assessment on your retirement income. However, if you have a shorter mortgage repayment period then lenders will look at your current income. 

If you’re taking out a mortgage at 50, then you will most likely have the typical repayment period of about 25 years. It’s worth noting that some lenders aren't keen to lend to people who are much older than the retirement age, which is typically 65 in the UK, although this age is going up. 

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What Types Of Mortgages Are Available When Over 50?

Over 50s can apply for the same mortgages as other borrowers. These include:

Standard Mortgage -  

Standard Mortgages are available to those over 50 with the choice of a Fixed or Variable rate mortgages. 

A Fixed-rate Mortgage is available to over 50s. With a Fixed-rate Mortgage, the interest rate you pay per month is guaranteed to stay the same for a fixed amount of time, usually 2-5 years. 

A Variable-Rate Mortgage will adjust each month depending on your lender’s standard variable rate. The lender can change this interest rate whenever it wants. This means you could be paying more some months, but less if the SVR is reduced. 

Lifetime Mortgage - 

Another available mortgage option for over 50s is the Lifetime Mortgage. A Lifetime Mortgage can be taken out once you own your home outright. If you have paid off your current mortgage, a Lifetime Mortgage will allow you to release some equity in your house without selling it. 

You must be over 55 and the loan you take out does not have to be paid back until you go into long-term care or pass away. A Lifetime Mortgage might affect any inheritance you leave as your house will be sold to pay for the interest from the mortgage.

Retirement Interest Only (RIO) - 

A Retirement Interest Only (RIO) Mortgage is ideal for people age over 55 who want to remortgage to an interest-only deal. Remember, if you're remortgaging, you'll need the help of a remortgage conveyancer.

An RIO Mortgage works by borrowing a percentage of the value of your house as a cash lump sum. You’ll be charged only on the interest of the loan. The loan will be repaid once you have either sold your house, go into a care home, or pass away. 

To apply for an RIO Mortgage, you must be over 55 and have a reliable and regular income that will prove you can pay back the monthly interest repayments only. Interest rates are usually higher than traditional mortgages, ranging from 2.74% to 4.55%. 

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How Can You Increase Your Chances Of Getting A Mortgage Over 50?

If you can prove you have a reliable regular income and you can afford to pay back your mortgage loan, then you have a much better chance of being accepted for a mortgage. There are certain things that will also work in your favour:

You Have Equity in Your Home - If you’re remortgaging and have equity in your property, this will lower your loan-to-value (LTV). The lower the LTV, the more keen lenders will be to lend to you. 

You Have Savings - If you have a decent amount of savings as well as a regular pension income or income from your job, you will stand a better chance of getting accepted for a mortgage. A lender will view your savings as a backup plan to repay your mortgage if anything happened with your income.

Which Lenders Offer Mortgages For Over 50s?

There are currently 18 providers offering an RIO mortgage, with the only high street option being Nationwide. Building societies offering an RIO mortgage include Bath Building Society, Tipton & Coseley Building Society and Hodge Lifetime. 

Learn More About Mortgages and Deposits

This is part of our mortgages and deposits guide. In our next article, we'll explore how to save for a house deposit, from how to boost your savings and saving whilst renting. To find out more read saving for a mortgage deposit.

Disclaimer

All data, research, facts and figures have been taken from reputable sources and government data that was accurate at the time of writing. Mortgage criteria, interest rates and policies change regularly and vary depending on the lender and type of mortgage you have. You should speak directly to your mortgage lender for clarification. It should be noted that your home may be repossessed if you cannot keep up with your mortgage payments.
Martha Lott

Written by Martha Lott

Having written for Huffington Post and Film Criticism Journal, Martha now regularly researches and writes advice articles for everything moving house related.

Emma Lunn

Reviewed by Emma Lunn

Freelance Personal Finance Journalist,

Emma Lunn is an award-winning journalist who specialises in personal finance, consumer issues and property.