Borrowing options when you're aged 70+
In short, the answer is yes, customers can get mortgages over the age of 70 and there are a variety of options out there but it really depends on lenders’ individual criteria and your personal circumstances.
There are a few different options for later life mortgages if you are over the age of 70.
The first option is a repayment mortgage which you may still be eligible for depending on your current income from any work or pension and the amount of equity you currently have in your home. Lots of lenders are increasing their maximum age at application with some lending up to the age of 85. Nottingham Mortgage Services can search whole of market mortgages to help find the right deal for you.
The second option could be a Retirement Interest Only mortgage, often called RIO. With a RIO mortgage you are able to borrow a percentage of the value of your home as a cash lump sum. There is no end date by which you need to pay off the loan and you will only be charged the interest amount borrowed. The loan is repaid when the house is sold either when you are able to, you pass away or go into long term care. RIO mortgages mean that you will have a regular interest repayment so you must have a means of covering these now and in the future. Affordability and credit checks also still apply with a RIO mortgage. Some points to note about the RIO mortgage are as follows:
But you must also consider:
- There is no maximum term of the loan
- There is not always a maximum age at application
- RIO can be used for re-mortgage or to raise capital for gifting to family members for example
There is also the option of an Equity Release.
With only the interest on the loan being paid, the outstanding loan remains unchanged for the duration of the mortgage. In addition, the level of equity held in your property may be affected by any changes to its value.
- Affordability will be based on both applicants if there is more than one and acceptance will depend on the lower earner being able to keep up the payments on their own
- The maximum loan to value (LTV) is currently approximately 65%
Equity Release will reduce the value of your estate and can affect your eligibility for means tested benefits.
If you decide to look into Equity Release, your Nottingham Mortgages Services adviser will refer you to a qualified adviser within the Quilter Financial Planning Network.
Some lenders will be happy to lend to someone up to the age of 80 as long as the repayments are completed by the time the homeowner is 85.
There is not an age limit for applying for a RIO mortgage or Equity Release; you simply must be over 55.
You could potentially get up to 15 years on a mortgage term at age 70 as lenders will generally want loan amounts to be repaid by age 85. The mortgage term on a RIO mortgage is indefinite as the loan amount is repaid once the property is sold.
Reducing short term debt would improve your chances of getting a mortgage as the usual affordability checks apply even after the age of 70. Equity Release could be an option to consolidate smaller debts into one monthly payment but it would be best to discuss your options with a mortgage expert if you are unsure about your options.
As we have explained, there are several options for later life mortgages and the experts at Nottingham Mortgage Services could help you find the right mortgage deal for your circumstances. Speak to an adviser on the phone or in one of our 40+ branches via our video conferencing service, Nottingham On Demand (NOD). This video service is set up for you by branch staff and means that there’s no need to make a prior appointment.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
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