With the current economic climate, more people than ever still have a significant amount outstanding on their mortgage when they reach retirement age. Many lenders won’t accept these applications as they will be unsure whether you can afford the repayments without a salary-based income.
Getting a mortgage as a pensioner
If you’re over the age of 65 you may still be in a situation where you haven’t paid your entire mortgage and are looking for mortgage products. This might be to help downsize to a smaller property, remortgage your current home or release equity in the form of a home reversion or lifetime mortgage.
However, getting a mortgage when you hit retirement age can be difficult. This is because you will no longer have a regular salary to help pay it off. Most lenders will consider you as a high-risk customer as they will be unsure whether you will be able to afford the repayments using your pension.
Is there an age limit for getting a mortgage?
Although there’s no maximum age to apply for a mortgage, most lenders will have their own limits for when you can:
- Take out a mortgage – usually between the ages of 65 and 80
- Pay their mortgage by – usually between the ages of 70 and 85
This means that the older you are the shorter your mortgage term is going to be.
Equity release options
Equity release is the process of accessing the money tied up in the value of your property. These products are only available to those over the age of 65 and allow you to take out a long-term loan on your property. This money can be used to help pay off your mortgage or for other financial needs in later life.
Read more about equity release options
Mortgage approval for pensioners
Although it can be difficult getting a mortgage as a pensioner, it’s not impossible. The best chance you have at being accepted is by using a specialist broker who can put you in touch with the right mortgage lenders.
Some other things that will help your application include:
Your savings
Applying with a large mortgage deposit can help to improve your chances of getting approval. This is because the more money you put in yourself, the less you will be looking to borrow.
Your credit score
Lenders will look at your credit situation before they look at anything else. Therefore, it’s a good idea to check your score before making any applications. You can check your credit score with companies such as Experian and Check My File.
If you do have bad credit, as a specialist mortgage broker we can look into your individual situation and help source a suitable lender.
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