If you’re looking for a new mortgage in your 70s or above, you may wonder how easy this is to accomplish.
It’s understandable that many individuals in the 70+ age group have concerns that lenders might reject their mortgage applications due to their age or potential income reductions in retirement.
It’s a fact of life that we’re all living longer, and working longer, in many cases beyond the typical retirement age of 65.
Fortunately, the lending market has evolved in recent years. Lenders are increasingly recognising the unique circumstances of individuals in their 60s, 70s and beyond, and they have become more flexible in offering mortgage options.
Even if you face a rejection for a standard mortgage, there may still be other borrowing options available to you.
Can I get a mortgage over 70?
It is still possible to get a mortgage over the age of 70.
Although legally there is no maximum age, many lenders have traditionally used 65.
While there may be certain unavoidable considerations, such as retirement income and repayment plans, many lenders have become more accommodating in recent years and offer mortgage options specifically designed for individuals in their 70s and beyond.
Lenders now assess many different factors when considering mortgage applications from pensioners, including your overall financial stability, retirement income, and ability to afford repayments.
They understand that age alone should not be a barrier to obtaining a later life mortgage.
While will lenders will request details about your pension and impose restrictions on the maximum term, getting accepted for a mortgage at 70, or 75, should still be possible.
Equity Release
If you’re a homeowner over 55 looking to unlock the value of your property to support your retirement, there are equity release products specifically designed for this purpose. Home reversion and lifetime mortgages are two options to consider.
What is the maximum age limit for obtaining a mortgage?
The maximum age limit for obtaining a mortgage will vary between lenders and the type of mortgage product. While some lenders have specific upper age limits, others are more flexible and consider each application on a case-by-case basis.
Traditionally, many lenders used to set an upper age limit of around 70 to 75 years old. However, in recent years, there has been a shift toward more flexibility. Consequently, lenders have extended their age limits, allowing borrowers to apply for mortgages later in life.
Some may have a maximum age limit for when the mortgage term ends, typically between 70 and 95 years old. This means that the mortgage must be fully repaid or settled by the specified age.
You will find more useful information in our article: What’s the longest mortgage term you can get?
Why is it more difficult to get a mortgage over 70?
This is due to affordability, or rather proving affordability.
Sure you may be just 70 now, but if you need a 15 year mortgage then you will be 85 at the end.
Up to around age 65 is in the safe zone. Few lenders will worry about a mortgage that ends in and around age 65. But after this you will need to demonstrate how you can afford the repayments when you are retired and receiving a lower income.
Can you get a mortgage after you retire?
Yes, you should be able to get a mortgage after you retire. Your options will be more limited as lenders become more wary about lending to people after they retire due to their income being lower.
However, there are an increasing number of lenders who will consider lending to you after retirement. You’ll need to be able to evidence your income during retirement, whether that’s through your pension or other means. You also may need to take a shorter term mortgage, as the lender may want you to repay the loan by a specific age.
Which lenders offer these mortgages?
There are a good number of banks and building societies that are willing to offer mortgages to individuals in their 70’s. However, it’s important to note that different lenders may have varying terms regarding the repayment period, so it’s always wise to double-check. The table below shows the maximum age at the end of the mortgage term.
| Lender | Max age at expiry |
|---|---|
| NatWest | 70 |
| HSBC | 75 |
| Santander | 75 |
| Halifax | 80 |
| Leeds | 85 |
| Hodge | 95 |
| Family BS | 95 |
The different types of mortgage rates
Variable Rate Mortgages
With a variable-rate mortgage, the interest rate can change at the lender’s discretion and may not exactly mirror changes in the Bank of England base rate. As the rate can go up or down, your monthly repayments will vary, so it’s crucial to factor in this potential fluctuation when planning your budget.
Tracker Mortgages
Tracker mortgages align with a bank base rate, often the Bank of England base rate. As this fluctuates, your mortgage rate and monthly repayments will adjust accordingly. Some tracker mortgages may have a minimum “floor” or “collar” rate, ensuring that the rate won’t drop below a certain level, even if the base rate does.
Fixed Rate Mortgages
These mortgages maintain a consistent interest rate for a specific period, typically two, three, five, or even ten years. With a fixed rate, your monthly repayments will remain unchanged during this period, making budgeting more manageable and protecting you from potential rate hikes.
Discount Mortgages
Discounted-rate mortgages offer a percentage reduction off your lender’s standard variable rate (SVR) for a specific period, often two or five years. For instance, if the SVR is 4% and your mortgage has a 1.5% discount, your interest rate would be 2.5%. Keep in mind that the mortgage rate will rise and fall in line with changes to the lender’s SVR.
Repayment methods
Let’s not forget the repayment methods.
There’s only three to choose from, and each one will affect the amount you pay each month.
- Repayment: The most popular and most expensive but also the ‘safest’. You will pay off your mortgage with each monthly payment, until it is all gone.
- Interest only: The cheapest option (but maybe the least safe). You only pay the interest each month and need another way to pay the mortgage back at the end.
- Part and part: A combination of the other two, so you will still have a lump sum to repay at the end.
How do part repayment and part interest only mortgages work?
We take a look at what a part and part mortgage is, how it works and whether it could be the right option for you.
Can I change my interest-only mortgage to repayment?
In this article, we’ll go over everything you need to know about switching repayment methods.
How do you repay an interest only mortgage?
We take a look at interest only mortgages; how they work, who would want one and how you pay them back.
How long does a mortgage for over 70s last?
The term of your mortgage will depend on the lender you choose. Some lenders have specific age restrictions that determine the maximum repayment period for the loan.
As a result, you may find that certain lenders will only offer you a shorter term, such as 10 or 15 years, instead of the typical 25-year term. While a shorter term means higher monthly payments, it also means paying less interest over the course of the mortgage.
It all depends how old you are when you apply and how many years you want the mortgage to last.
However, there are lenders who do not impose age restrictions, allowing you to secure a mortgage with a 20/25-year term if it suits your needs.
Borrowing into retirement
Applying for a mortgage in later life can be particularly challenging. In this guide we will outline the options and solutions available when you borrow into retirement.
Equity Release Guide
Over 55? Our complete guide to unlocking the cash from your home using an equity release plan.
Mortgage Broker Guide
In this guide we’ll take a look at what mortgage brokers do, how they can help you, how they get paid plus tips on how to find a good one.
How to improve your chances of getting a mortgage
If you’re looking to secure a mortgage at the age of 70 or over, there are some steps you can take to get yourself mortgage ready which will increase your chances of approval.
Here are some top tips:
Improve your income position
Demonstrating a regular and stable income is vital when applying for a standard residential mortgage. Lenders want to see that you can comfortably afford the repayments. Consider ways to increase your income or highlight any additional sources of reliable income. Paying off existing loans or credit card balances will also free up income, improving your affordability.
Boost your credit score
A higher credit rating enhances your prospects of securing favourable mortgage terms. Ensure you are registered on the electoral roll and check your credit file for any errors or discrepancies. Taking steps to improve your credit score will put you in a stronger position.
Consider a shorter term
Opting for a shorter term is likely to make your application more appealing to lenders. While this will result in higher monthly repayments, it ensures that the debt is repaid more quickly, reducing the financial burden as you approach your later years. You need to convince the lender that the payments are manageable.
What paperwork will I need?
Older borrowers will need to provide the standard documentation when applying for a mortgage. In addition, you will need to show proof of any pension income, annuities, investments, property and shares. This is all to help the lender establish your affordability for the monthly payments.
Most lenders will want to see the following:
- Payslips, P60
- Self employed accounts, SA302
- Bank statements
- Pension statements
- Details of your regular expenses
- The amount of savings you have
- Any income you receive from investments or property
Mortgage options if you are over 70
If you find that you’re unable to qualify for a standard mortgage or it doesn’t meet your specific needs, there are alternative products available that cater specifically to retirees and individuals over the age of 70.
Let’s take a look:
Equity release
Equity release offers you a way to access the equity tied up in your home without having to sell it. It’s important to approach these products with caution, as they can be expensive and come with certain risks.
There are two main types of equity release products to consider. Lifetime mortgages are more common, allowing you to borrow against the value of your home while retaining ownership.
Home reversion, on the other hand, involves selling a portion or all of your property in exchange for a lump sum or regular payments, while still having the right to live in the home.
Retirement interest only mortgages
Retirement interest only mortgages (RIOs) can be a useful option if you’re retired and seeking to downsize or remortgage your home to pay off your original mortgage. It’s important to note that RIOs often offer more affordability compared to equity release options.
With an RIO, you’ll be required to pay the interest on the loan each month, which is a key distinction from equity release where payments are optional.
This can make it a more cost-effective option.
Ready to explore your options?
If you’re on the cusp of starting your mortgage journey and could use the guiding hand of a professional, don’t hesitate to reach out to a reputable mortgage broker.
They will make the process smoother and more profitable than going it alone. And remember, knowledge is power.
The more you know, the better decisions you can make. Keep reading, keep asking questions, and keep moving forward on your journey.
