Mortgages for the Over 50s
You are never too old!
What options are available to the OVER 50s?
We are seeing an increasing number of borrowers over 50 years of age with a mortgage outstanding on their homes.
But the mortgage market is now opening up to older borrowers with a number of options available!
1. Mortgages which run to age 70, 75, 80, 85 or even longer
These mortgages are all about proving sustainable affordability. We have many Lenders which will routinely consider earned income to the age of 70 and 75 years of age on residential mortgages, and a number of lenders which will offer longer term mortgages to 80, 85 or older.
With Buy to Let mortgages we have lenders which will even consider a 35 year term for any experienced Landlords, whatever their age at application.
These options should always be considered first!
2. Retirement Interest Only Mortgages (RIO Mortgages)
A change in regulation in 2018 enabled lenders to offer this new type of mortgage.
Again, based on the sustainable income of the borrowers, some lenders offer long term mortgages on an interest only basis, with the term of the mortgage only ending on the death (or move to permanent long term care) of the borrowers.
There are limits on the percentage of the property’s value which you can borrow, but there is no limit to your age at application.
As you are paying your mortgage interest as you go, the interest is not being added to your loan and eating into your equity.
These mortgages are a great step forward for older borrowers with good pension, rental or investment income.
3. Equity Release (Lifetime Mortgage - over 55)
This allows you to borrow money against the equity in your home, with the interest added to your original loan amount. The loan (and the interest) is repaid on your death or when you move to permanent long term care.
You must be careful as taking money out of your property could reduce the amount you could claim on means tested benefits and could reduce the equity available to you should you wish to downsize.
Careful professional advice needs to be taken if you are considering this type of mortgage.
Whilst we do not offer advice on these, but we are able to recommend a very experienced professional in this area.
These mortgages are a good option to consider if you do not have a high retirement income and wish to remain in your home.
4. Older People's Shared Ownership (over 55s)
It works in the same way as the general Shared Ownership scheme, but you can only buy up to 75% of your home. Once you own 75% you won’t have to pay rent on the remaining share.
5. Unusual Circumstances
If your circumstances don’t fit the above scenarios, please talk to us to see what we can do.
Here are some examples of where we have secured mortgage funding in more unusual situations.
- Example husband aged 85 and wife aged 56
- Example single man aged 78 with a 25 year term
- Example mortgage affordability based on the younger borrower
The availability of the above mortgages will depend on the individual’s own circumstances along with the terms & conditions included.
If you are experiencing financial difficulty and struggling to make repayments, then you can contact your lender who may be able to help taking account of your individual circumstances.
You may want to contact one of the free impartial money guidance and debt advice services such as StepChange, Citizens Advice, or Turn2Us.