How to get a mortgage over 50
Never have we been further away from a pipe and slippers being closely related with retirement. From a survey that we commissioned last year1 we found that there is a group of 'YOLO' pensioners living with the 'you only live once' motto - 46% of them claimed to have more disposable income than ever before in their lives due to their savvy savings habits earlier in life.
Yet, as you get closer to retirement getting a mortgage can become more difficult as a lot of lenders have upper age limits meaning that the end of your mortgage terms won't be able to go beyond this. Affordability rules can then become problematic. Here is how to find a new mortgage whether you want to move house or remortgage your current home. A 25 year mortgage at 50 may not be off the cards!
Can I get a mortgage over 50?
The short answer is yes, you can get a mortgage over 50. But, it depends which lenders are willing to lend to you. Whole of market experts from Nottingham Mortgage Services will search the mortgage market to offer the best advice for you.
The Mortgage Market review, introduced in 2014 means that lenders have a legal duty to demonstrate customers can meet their monthly mortgage repayments - both now and in the future. Each lender has a slightly different interpretation of the rules. Ben Osgood, Senior Mortgage Manager for The Nottingham says, "What lenders look at is how much of the mortgage will be during your retirement years. For example, if your retirement is 10 years away but the mortgage you're looking at has a 25 year term then this affordability will be probably based on your retirement income, But, if retirement is 10 years away but the mortgage has a 15 year term then lenders would look at your current income."
What options are there for over 50 mortgages?
If you want to borrow money to repay in full then you have the option to take out a standard mortgage, with many lenders willing to lend even if you are already retired. Other options that may be open to you include a Retirement Interest Only (RIO) option – which allows you to borrow money until you sell your house, move into care or pass away and only pay the interest. Find out more about RIO mortgages. You could also look at Lifetime Mortgages which allow you to borrow and add some or all of the interest to the mortgage. Ask a Nottingham Mortgage Services adviser which option may be right for you.
Lifetime Mortgages will reduce the value of your estate and can affect your eligibility for means tested benefits.
What is the age limit for getting a mortgage?
Most lenders will have their own age limit for mortgages. A rough guide for taking out a mortgage is a maximum age of 65 - 80 and the age limit for when a mortgage would end would be between 70 and 85.
How many years mortgage can you get at 50?
You could get up to 35 years on a mortgage for over 50s but this will depend on lenders and their specific affordability criteria as well as your credit score. Alternatively, a RIO or Lifetime Mortgage removes the need to negotiate this aspect. Again, a mortgage adviser will be able to let you know the options that will fit your circumstance.
How to improve your chances of getting a mortgage
To improve your chances of getting approved for the mortgage that you would like, bear in mind the following points.
- Have a clear plan of how you will pay the loan back including how much you can afford for your monthly payments. You could also think about whether you will be able to overpay at any time or pay off lump sums.
- Know how much you can afford – compare your monthly incoming finances to your monthly outgoings. See what your previous mortgage repayments have been and decide whether you would need the new payments to be lower or you could afford to pay more each month.
- Work on improving your credit score to the best it can be by making sure that you pay bills on time and demonstrate good use of credit. You can also dispute any inaccuracies on your credit report if you notice that there’s something that you don’t agree with on there.
How to find a mortgage if you are over 50 – detailed information about how the mortgage advice service will help
If you are over 50 and would like advice on your mortgage then talk to a Nottingham Mortgage Services adviser at your nearest branch or call the team of mortgage advisers on 0344 481 0013.
Should you consider a remortgage?
"You could, if you want to break free from your existing lenders' restrictions on raising capital, extending your mortgage term or if they’re asking you to repay your loan earlier than you're happy to." - Ben Osgood
Should you consider a Lifetime Mortgage?
Ben recommends, "If you have value in your property that you’d like to release, a Lifetime Mortgage could work well for you. Or, where a mortgage that you won’t need to repay like a standard mortgage could make a real difference to you or loved ones."
Can you get a 25 year mortgage at 50?
Ben says, "The range of options has never been greater, now is a great time to speak to an adviser."
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Whole of market mortgage advice is provided by Nottingham Mortgage Services Ltd; an appointed representative of Intrinsic Mortgage Planning Ltd, which is authorised and regulated by the Financial Conduct Authority; (see the FCA register at register.fca.org.uk, reference No. 440718). Nottingham Mortgage Services Ltd is a wholly owned subsidiary of Nottingham Building Society and registered in England and Wales, No. 03089887.
1 1,027 retired people in the UK were interviewed online between 23rd and 24th October 2018 by independent research company Consumer Intelligence