If you want to remortgage your existing home or take out a mortgage on a new property when you’re in your 60s or above, how easy is it to do?
Many people over the age of 60 worry that lenders will refuse their mortgage application on the grounds that their income may drop once they retire, leaving them unable to keep up with repayments.
However, in recent years lenders have become increasingly flexible about offering mortgages to people in their 60s and beyond, and even if you are turned down for a standard mortgage, you might find that there are other borrowing options available to you.
Here, we look at what age various lenders will lend up to, the sort of information you will need to provide them with to support your mortgage application, and ways you might be able to improve your chances of being accepted.
If you’re still in your 50s, you can find out more about all the different mortgage options that may be available to you, and how they compare, in our article Mortgages for over 50s: What you need to know.
Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
Contents
- Why remortgage if over 60?
- What’s the age limit for getting a mortgage?
- What can I do if my lender has a low maximum age limit?
- 3 ways to improve your chances of getting a mortgage over 60
- Mortgages for over 60s: Other borrowing options to consider
- How to get a mortgage over 60: Where to go for mortgage advice
Why remortgage if over 60?
Remortgaging is a good idea at any age if it saves you money. If you’re currently on your lender’s standard variable rate (SVR) mortgage, for example, you could potentially save hundreds, if not thousands, of pounds a year by remortgaging to a cheaper deal.
For example, someone with a £150,000 repayment mortgage with 15 years left to run who is borrowing 60% of their property value would be paying £1,449 a month if they were on the typical SVR of 8.18%. Their monthly payments would fall to £1,153 a month if they remortgaged to a best buy two-year fixed mortgage rate of 4.57% – a saving of £296 a month or £3,552 a year.
Bear in mind that this information was correct at the time of publishing and is subject to change. The criteria used is illustrative only and the actual savings that might apply to you will depend on your individual circumstances.
Many people in their 60s stay on their lender’s standard variable rate mortgage under the assumption that their age means remortgaging isn’t an option for them. However, age shouldn’t be a barrier and several banks and building societies will lend up to the age of 80 and beyond – subject of course to passing their affordability checks (see below for maximum mortgage age limits).
Read our article Five good reasons to remortgage now to find out more.
If you think remortgaging could be a good option for you, it’s almost always a good first step to see what rates are available in the market. You can use our mortgage service to compare remortgage deals from the whole of the market and find out how much you might be able to save. If you are nervous about switching lenders, it is still worth filtering for deals from your existing lender so you can see how much you could save from transferring to a new scheme with them. Our mortgage service allows you to compare the best rates from both your current lender and the wider market, quickly and easily.
What’s the age limit for getting a mortgage?
Many lenders will let you take out a loan as long as it’s repaid by your 75th birthday, and while some lenders are more flexible, some might want you to repay your mortgage by the time you retire. To see your retirement age, have a look at our article When can I retire?. The age limits quoted below are for residential mortgages, as some lenders will let you repay a buy-to-let mortgage until you’re older.
Barclays: You must have repaid your mortgage by the time you reach 70 or by the time you’ve retired – whichever is sooner. If you’ll be older than this, the bank says it will still consider your application but you’ll need to provide proof that you’ll be able to repay your mortgage when it extends into your retirement.
Bath Building Society: You can apply for a mortgage with Bath Building Society up to the age of 80. The mortgage must be paid off by the time you reach the age of 85.
Chelsea Building Society: You must have repaid your mortgage by the time you reach your 80th birthday. Chelsea Building Society mortgages are only available by going direct to them, and are not available via mortgage advisors.
Clydesdale Bank: You must have repaid your mortgage by the time you reach your 75th birthday.
Halifax: The maximum age for a Halifax mortgage is 80.
HSBC: The maximum age for mortgage applicants (or for the oldest borrower for joint applications) is 75 at the end of the term. Applicants who will be 68 or older at the end of the term need to be able to show evidence of how they will continue to pay the mortgage for its full term.
Hodge Bank: This bank is a specialist equity release lender, but also offers a 50+ residential mortgage. When you apply for a 50+ mortgage, the bank will consider the earned income of both employed and self-employed customers up to a maximum age of 80, but there’s no upper limit if the mortgage is affordable on a pension income.
Leeds Building Society: You must have repaid your mortgage by the time you reach 85. The maximum age you can apply for a mortgage is 80.
Mansfield Building Society: You can repay your mortgage up to the age of 85.
Nationwide Building Society: If you’re not already a customer, you must have paid off your mortgage by the time you’re 75.
If you’re an existing customer and your mortgage isn’t due to be repaid until after you’re 75, you can take out another mortgage that lasts the same term as your existing loan (i.e. you can remortgage without being expected to repay your loan before you’re 75).
Market Harborough Building Society: Will lend up to the age of 85, with no minimum income requirement on residential loans for applicants in retirement or preparing for retirement.
Metro Bank: The maximum age you can be at the end of your mortgage term is 80.
NatWest: You must have paid off your mortgage by the time you reach the age of 70.
Saffron Building Society: No maximum age, however the mortgage term will be assessed on a case by case basis. Working income can only be accepted up to a maximum age of 75.
Santander: Santander offers mortgages up to a maximum age of 75. For interest only mortgages the maximum age is normally 65. Santander doesn’t normally lend past the date you expect to retire.
Yorkshire Building Society Society and Accord mortgages (Accord is part of Yorkshire Building Society, and its products are only available via brokers):: You must have repaid your mortgage by the time you reach your 80th birthday.
What can I do if my lender has a low maximum age limit?
If you are with a lender that has a low upper age limit, you may need to remortgage if you can’t repay the loan by then.
However, If you’re on a good mortgage deal and/or you have hefty early redemption penalties to pay if you switch now, you may want to wait until your current deal runs out. Don’t wait until the last minute to do something though – give yourself enough time to sort it out. You can usually secure your next mortgage deal three to six months before your existing mortgage deal finishes. The main benefit of doing this is that you can roll straight from your current deal onto your next one without going onto your lender’s standard variable rate, which will invariably be higher than your new mortgage rate.
3 ways to improve your chances of getting a mortgage over 60
There are several things you can do to boost your chances of having your mortgage application accepted if you’re aged 60 or over.
1. Check your credit score
Having a good credit score can provide lenders with reassurance that you’ve managed debts responsibly in the past. If your credit score isn’t as high as it could be, then it can help to pay off any outstanding debts or cancel any credit agreements you no longer use.
You can easily check your credit score for free. ClearScore offers a free credit checking service that accesses Equifax data. They also offer free identity protection that scans for stolen passwords, security problems and fraud defence tips. MoneySuperMarket’s Credit Monitor tool lets you check your score using data from TransUnion and offers free personalised tips to help it grow. Alternatively, you can sign up with Experian and check your credit score with them for no charge and Totally Money also allow you to check your score free of charge using data from TransUnion.
If you’re worried that your credit score might need a boost before you apply for a mortgage, read our article Seven steps that could improve your credit score.
2. Work out how much you can afford to borrow
The easiest way to see how much you might be able to afford to borrow is by using an online affordability calculator. We have a mortgage affordability calculator, which will give you a rough estimate of what you might be able to afford, based on current market conditions.
Once you have a rough estimate, it can be helpful to compare different mortgage deals to understand what your monthly repayments are likely to be. A mortgage broker can do this for you to ensure you find the best possible deal.
Once you’ve found the right mortgage deal for you, you can apply for an Agreement in Principle (AIP) which details how much you could borrow before you apply for a mortgage. However, it’s important to remember that the AIP isn’t a binding agreement, so when you come to apply for a mortgage, you may receive a different offer. Find out more in our guides What is a mortgage agreement in principle? and How much can you borrow for a mortgage?
3. Get all your paperwork in order
Any lender you apply for a mortgage with will want to see proof of your income and outgoings, so they can be certain that you’ll be able to keep up with your repayments.
Some of the paperwork you’ll need to provide includes:
- Driver’s license or passport showing your name and address
- Utility bills
- Employment details with proof of your income
- Payslips for the last three to six months
- Bank statements for the last three to six months
- Evidence of your deposit
If you’re planning to retire during the mortgage term, you’ll need to provide evidence to lenders that you’ll still have sufficient income to cover your monthly repayments. The following types of evidence can usually be used to verify your anticipated retirement income:
- Private / Company Pension Forecast Statement
- State Pension Statement (this can be obtained from The Pension Service).
- Annuity Statement
- Any income from employment or self-employment
These will need to be recent documents, so should be dated within the last 18 months.
Read our guide How to apply for a mortgage – everything you need to know to find out more about the mortgage application process and what sort of information you’ll need to provide.
Mortgages for over 60s: Other borrowing options to consider
Homeowners aged 60 and above who want to take out a mortgage or are looking to remortgage to cut costs don’t only have the option of a standard mortgage. Here, we look at two other later life mortgages borrowers those aged over 60 may want to consider.
Retirement interest-only mortgages
Retirement interest-only mortgages, usually known as RIO mortgages, are designed for those who are approaching retirement. This type of mortgage might be worth thinking about if, for example, you currently have an interest-only mortgage, but aren’t sure you’ll be able to repay the capital you owe when your mortgage term ends.
Rather than your mortgage finishing on a set date, a RIO mortgage enables you to carry on making interest payments indefinitely. The capital only has to be repaid when you die or move into long-term care and the property is sold, so you can stay in your home for as long as you want without having to pay back the capital owed, providing payments are maintained.
Remember that as with any other kind of mortgage, if you don’t keep up with your monthly payments on your RIO mortgage, there is still the risk that your house could be repossessed.
However, as you’re only repaying interest each month, your monthly payments will usually be relatively low, and it should be easier to prove you can afford them. This type of mortgage is not without its downsides though, and you should let family members know if you’re considering taking this route. The mortgage capital will need to be paid back when you die or go into long-term care, which means you won’t be able to leave as much of an inheritance to loved ones as perhaps you might have liked.
Lenders offering retirement interest-only mortgages are often building societies and include Leeds Building Society, Nottingham Building Society, Nationwide Building Society and Bath Building Society and many others. There’s no minimum age requirement, but they are typically aimed at older homeowners in their 50s or 60s who are likely to find them easier to qualify for than a standard interest-only mortgage. You can find out more about retirement interest-only mortgages in our guide How retirement interest-only mortgages work.
Lifetime mortgages for over 60s
A lifetime mortgage is an equity release plan, so rather than making monthly interest payments as you would with a standard mortgage, the interest you owe builds up over time and only has to be paid back, together with the amount borrowed, when you either die or move into long-term care.
You must seek professional mortgage advice before you can apply for a lifetime mortgage. You can find an equity release adviser via the Equity Release Council’s (the trade body for the equity release sector) website here. Plans sold via its members come with a guarantee that you can stay in your home for as long as you want to, and that you’ll never end up owing more than the value of your property.
Bear in mind that taking equity out of your home is not without risks. The interest owed can build up substantially over time, and will reduce the value of any inheritance you might have been planning to leave.
You can see how much a lifetime mortgage might cost you with the help of our Lifetime Mortgage Calculator.
Taking a lump sum out of your property could also affect your entitlement to means-tested benefits. You can find out more about equity release in our article Equity release: what is it and how does it work? and about lifetime mortgages specifically in our guide Lifetime mortgages explained.
If you’re looking for somewhere to start, you can get expert advice from an independent equity release specialist with Unbiased. They’ll listen to your needs and talk you through your options, so you can decide if equity release is the right option for you.
You can find out more about lifetime mortgages and retirement interest-only mortgages in our guide What’s the difference between a lifetime mortgage and a retirement interest-only mortgage?
How to get a mortgage over 60: Where to go for mortgage advice
If you’re aged 60 or over and aren’t sure which mortgage or remortgage deals you’ll be eligible for, it may be worth speaking to a professional mortgage advisor to find out which options might be available to you. You can read more about how a mortgage advisor might be able to help you in our guide Should I get advice on my mortgage?
If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
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