Mortgages for Over 60s

Looking for a mortgage later in life? Here at Proper Finance, we may be able to help. Getting a mortgage in your 60s in not an unheard of scenario. It’s true that some lenders might deter from offering money to those over a certain age but that is not the case for everyone. Read on to learn whether you’re eligible for an over 60s mortgage, the different mortgages available to you, and how to apply. 

Can I Get A Mortgage In My 60s?

If you are looking to get a mortgage into your 60s, it might be a little harder to get your hands on. As many people start thinking about retirement at this stage, the typical correlation to a drop in income can deter lenders. In order to be approved for a mortgage you will therefore need to show that you can keep up with repayments into retirement.

Reasons you might want a mortgage over the age of 60 are to:

• Move house
• Buy a new home after separation or divorce
• Remortgage

The Mortgage Market Review (MMR) released in 2014, put a set of rules in place making it harder for those over 60 to get a mortgage. These rules mean that lenders are required to check if a buyer can afford their mortgage over its term.

However, fear not. Over recent years lenders have become increasingly flexible regarding mortgages for over 60s. Even if you are turned down for a standard mortgage for example, there are alternative borrowing options available to you such as:

• Equity release mortgages
• Retirement interest only mortgages

So yes, you can get a mortgage in your 60s depending on your income, credit score, equity, and the condition and value of your property.

The Best Mortgage Types for Over 60s

Some mortgages are designed specifically for those over the age of 60. Have a read through to see whether the options of a lifetime mortgage, retirement interest only mortgage, or equity release mortgage would best suit your personal needs and circumstances.

Lifetime mortgages

A lifetime mortgage is a lump sum that is taken out on your property. The loan and subsequent interest will be paid off by selling your house when you pass away or move into full time residential care. Any remaining money from the sale of the house will go towards those in your will as instructed.

To qualify for a lifetime mortgage you need to own your property and be over the age of 55. Any previous mortgages on the property must be paid off in full before the completion of the plan.

Other factors could further affect your eligibility for a lifetime mortgage. For instance, if you own a leasehold property with less than 75 years on the leasehold, you may be rejected.

Retirement interest only mortgages

A retirement interest only mortgage is a loan that is taken out against your home, starting either before or during your retirement and lasting until you die, are moved into full time care, or sell the property. An RIO is good if you’re looking to downsize or remortgage.

To get a retirement interest only mortgage you will need to already own your home, and have equity in your home. A good benefit of an RIO is that you will only be required to pay back the interest each month, not the loan, so they are often cheaper than lifetime mortgages. However this does mean you’ll have more to repay at the end having not paid monthly repayments.

Equity release mortgages

An equity release mortgage allows you to borrow some of the property’s value without making monthly payments. These loans are good if you’re older and have equity in your home, providing you with some extra money for your retirement without moving to a smaller home.

You can release equity from your home once you are aged 55 and above. You have the choice of taking out a lump sum or smaller monthly amounts with an equity release mortgage, and your debt will be paid off when you die or sell the property. Yet these mortgages often cost more than a standard mortgage and have higher interest rates, so it is worth considering if this is the right option for you.

Am I Eligible For An Over 60s Mortgage?

The main eligibility criteria for an over 60s mortgage is that you have proof to afford repayments throughout your retirement, this can be evidence of your pension income. Other factors that may impact your chance of acceptance are your age, credit score, and equity.

Typical mortgage age limits are:

• Under 65-80 to take out a mortgage
• Under 70-95 when the mortgage term ends

Can I Get a Buy To Let Mortgage For Over 60s?

For buy-to-let properties, borrowers have often found it difficult to receive funding due to age limits. Much like with a standard mortgage application, lenders offering buy-to-let mortgages for over 60s run the risk of their borrowers not being able to afford repayments throughout their retirement. 

Buy-to-let mortgages for over 60s are still an available option though. Age limits for these mortgages vary from lender to lender. For someone aged 65 with an income or pension you should still have a lot of buy-to-let mortgage options. For older borrowers and those over 75 in particular, your buy-to-let mortgage opportunities may be more limited. But fear not, some lenders have no age restrictions at all! It’s all about being matched with the right lender for your individual mortgage needs. 

How Can I Improve My Chances of Getting a Mortgage?

To improve your chances of getting a mortgage over 60 you will need a decent credit score. Outstanding loans, unreliable repayments, and having little credit history may affect your credit score and consequently make you less likely to receive a mortgage as you won’t be deemed as a dependable borrower.

To qualify for an equity release mortgage you will need:

• To own your property outright – you can use equity release to pay off your mortgage
• Enough equity in your home
• To maintain your home in good condition

Where Can I Get a Mortgage If I Am 60+?

Building societies are usually more inclined to lend to borrowers aged 60+ compared to banks. Many building societies do not have an upper age limit for when the mortgage needs to be repaid. Yet some building societies who do have an upper age limit on repayment include:

• Chelsea Building Society (repayment by 80)
• Leeds Building Society (repayment by 85)
• Mansfield Building Society (repayment by 85)
• Nationwide Building Society (repayment by 75)
• Yorkshire Building Society (repayment by 80)

Banks offering mortgages for over 60s include Barclays, Halifax, HSBC, Hodge Bank, Metro Bank, NatWest, and Santander. 

If you’d like to opt for an equity release mortgage, The Equity Release Council has a directory of advisers and providers which may be of help.

Apply Today For An Over 60s Mortgage

Competitive rates are available through Proper Finance. Simply apply online now to see if you’re eligible for an over 60s mortgage, and if approved we’ll connect you to some of our best UK lenders.