Age Limit For Mortgages In The UK

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Age shouldn’t hold you back from owning your dream home. Unfortunately, once you reach your 50s, you may face significant challenges because of the age limits for mortgages in the UK. Although these age limits for mortgages in the UK aren’t universal, lenders usually impose a maximum age for mortgage eligibility. Typically, these age limits range from around 65 to 80 years old for taking out a new mortgage, and around 70 to 85 years old for paying it off.

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Even if you’re at your retirement age, trying to get a mortgage doesn’t have to be scary. Here at When The Bank Says No, we know a thing or two about mortgage options for older borrowers, and the alternatives to traditional mortgages available to you. Read on below to find out how you can get your dream home at any age. 

Why Does Age Matter For Mortgages?

More and more people are having to buy properties much later in life than in years gone by, thanks, in no small part, to rising house prices stretching the age at which most of us will be ready to buy our first home. Unfortunately, securing a mortgage may be more challenging when you’re older because you pose a greater risk to mainstream mortgage providers. 

When you apply for a mortgage, lenders want to make sure you can pay it back. As you get older, your financial situation may change, which can impact your ability to make mortgage payments.

After you retire, your income is likely to decrease, even if you have a pension. In addition, lenders know that older individuals are at a higher risk of developing health problems, which can shorten the time horizon for paying off a mortgage. 

These factors contribute to lenders placing age limits on mortgages. However, you can get a mortgage if you’re over 50 or retired.

What’s The Current Age Limit For Mortgages In The UK?

As we’ve mentioned, there’s no all-encompassing maximum age limit for mortgages in the UK. 

However, you may experience greater challenges in getting a mortgage as you age. Here, we’ll lay down what you can expect about getting a mortgage depending on your age.

Mortgage Options For People In Their 50s

If you’re over 50 and considering getting a mortgage, various options are still open to you. Many lenders offer 25-year mortgage terms and competitive interest rates. However, some lenders may ask you to provide evidence of your predicted retirement outcome.

You should ensure that the mortgage repayments are within your means and you’re not stretching yourself thin. You may not want to continue paying your mortgage past your 70s.

Your 50s may be the last time you can enjoy mortgage flexibility, so it’s worth considering your options carefully. If you already have a mortgage, think about settling your mortgage early or releasing equity.

Every option comes with risks. If you want to ensure you’re making the most of the options available to you, you can consult with our friendly and knowledgeable team of mortgage experts at When the Bank Says No.

Mortgage Options For People In Their 60s

If you’re over 60, your options may be more limited. You may still find mortgage options with competitive interest rates, but the terms offered will likely be shorter, ranging from 10 to 20 years. 

To qualify for a mortgage at this age, you’ll need to show evidence that your pension, annuities, or other investments can cover your mortgage repayments. Lenders will want to ensure you have a reliable source of income to cover your mortgage.

You can still consider options like equity release. However, due to age caps, don’t expect to get a mortgage with a standard term length. Some exceptions do exist, but it’s best to consult with a mortgage broker to have a clearer view of your options. 

Mortgage Options For People In Their 70s

As you approach your 70s, few mainstream lenders will be willing to offer a mortgage to you. In addition, most lenders will likely limit the term to 15 years, making it less affordable.

That said, some lenders like building societies and niche banks are more flexible. They may allow lenders to repay their mortgage up to the age of 95.

Another option you can explore is getting a guarantor mortgage if you have someone who can continue to make repayments if you’re unable to. 

Mortgage Options For People In Their 80s

If you’re in your 80s, you can still find a handful of lenders that’ll allow you to get a mortgage as a first-time applicant. They aren’t as common, but they are out there. Relying on mortgage brokers, like us here at When The Bank Says No, is probably your best bet when looking for a mortgage in your 80s. 

Some lenders will have a maximum age at the end of the mortgage term, which could be as little as 85, which leaves you 5 years to complete your repayments. For most people, this may not be feasible. So you should consider other options, which we’ll discuss below. 

Can Your Age Impact the Amount You’re Eligible To Borrow?

The amount you’re eligible to borrow depends on your financial situation, not just your age. 

Nonetheless, when you’re in your 60s, 70s, and 80s, the shorter-term loans that are available to you may be cheaper overall.

Despite the more limited loan amount, monthly repayments may still be higher than the standard 25-year mortgage. You may also need to make a substantial deposit.

You can still look for flexible lenders open to considering your specific circumstances regardless of your age.

What Are Some Alternatives To Traditional Mortgages?

Applying for a mortgage as an older borrower comes with many challenges, from shorter-term lengths to fewer lenders willing to offer a mortgage. Fortunately, there are several options you can choose from besides getting a traditional mortgage.

Equity Release Schemes

Equity release is a form of mortgage that allows older homeowners to borrow money against their homes by taking out a tax-free lump sum. You may choose between two types of equity release.

1. Lifetime Mortgage

If you’re aged 55 or over, you can get a lifetime mortgage. This mortgage allows you to borrow money using the value of your home as security.

You don’t have to make monthly payments with this type of mortgage, unlike traditional mortgages. However, you can choose to do so because the interest adds up over time.

The loan’s full amount plus interest is only due when you die or move into long-term care. At that point, the loan is usually paid off by selling the home.

2. Home Reversion

Home reversion is a type of equity release catering to homeowners over 65. It’s when you sell a part or all of your home to a reversion company for a tax-free cash lump sum or a regular income. Afterwards, you get to stay in your home as a tenant without paying any rent. 

The reversion company receives a share of the proceeds when your home is sold, while the rest goes to your inheritance. If you sold your entire home to the company, they’ll receive the entirety of the proceeds.

You usually only get around 20% to 60% of the market value of your home, depending on your age and health. The older you are, the higher percentage you’ll get.

Retirement Interest-Only (RIO) Mortgages

Retirement interest-only mortgages are designed for older borrowers, usually over 55. Just like a conventional interest-only mortgage, the borrower only needs to pay back the interest each month.

However, you don’t need to pay the full loan at the end of the term. Instead, you can pay it when you die or move into long-term care.

Older People’s Shared Ownership Scheme

The Older People’s Shared Ownership (OPSO) Scheme is aimed at people aged 55 and older. The scheme allows first-time buyers to buy an initial share of up to 75% of their OPSO home. 

After buying a share, you won’t need to pay rent on the rest.

This scheme is government-backed, and to be eligible you need to meet these criteria:

  • Your yearly household income is £80,000 (£90,000 if you live in London)
  • You’re a first-time buyer
  • You used to be a homeowner but can’t afford a home now
  • You’re a shared owner who wants to relocate

Guarantor Mortgages

Guarantor mortgages are another option if you’re a first-time home buyer and you don’t have enough income to be granted a mortgage on your own. 

It involves applying with a guarantor, usually a family member or close friend, who will repay the loan if the borrower can’t do so.

How Can I Increase My Chances Of Getting a Mortgage?

Regardless of your age, you should prove to the lender that you’re a responsible borrower who’s capable of managing debt and making regular payments.

1. Check Your Credit Report For Errors

Lenders check your credit report and use it to see if you can qualify for a loan. In the UK, you can pay £2 to access your credit report online.

Don’t assume that everything in your credit report is correct. After getting it, you should check to see if it has any mistakes that can negatively affect your credit.

Watch out for paid debts that reflect as unpaid in the report. There may also be incorrect debt information because of identity theft, out-of-date information, creditors confusing you with another debtor, etc.

Once you find errors, call the credit agency so these can be corrected immediately.

2. Consider Making A Larger Down Payment

If you have money saved up, you should consider laying down a large down payment. 

Doing so is a great way of showing your lender you’re a responsible saver. It also reduces the loan-to-value (LTV) ratio which looks more appealing to lenders.

3. Pay Your Bills On Time

Ensure you’re paying your bills on time to keep missed-payment defaults from showing up on your credit file. Missed payments will stay on your file for at least a year and up to six years. 

Even missing one payment can make it harder for you to get a mortgage.

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Age Limit For Mortgages In The UK FAQs

If you still feel overwhelmed and unsure where to start, we’ve answered some commonly asked questions to help you out.

1. Is the process for applying for mortgages the same for over 50s?

No matter your age, the process for applying for mortgages is the same. However, when you’re nearing or at retirement age, your lender may ask for additional information like your pension forecasts. 

Doing so helps them check if you’ll be able to pay back the mortgage when your regular income stops.

2. What’s the mortgage term available for those over 50?

The mortgage term offered by mainstream lenders is around 25 years, but this can vary depending on your age and the upper age limits set by the lender.

Most lenders set their upper age limits at 75, which means your term should end by that age. If you apply at 55, you’ll get a term length of 20 years. If you’re 65, this means you only have ten years. However, you can find a few lenders whose upper age limits are 85 or even 95.

3. How can a mortgage advisor help me?

Mortgage advisors are experts in the different mortgages available on the market. They can show you your options and help you find the best one based on your unique circumstances.

Here at When the Bank Says No, our expert advisors can help you reach your goal of owning a home, even if you’ve had bad credit or mortgage problems in the past.

4. Can I port my mortgage when I move houses?

When you move houses, you can take your mortgage with you. This is called “porting” your mortgage. If you do so, you’ll need to reapply because, technically, this is a new mortgage.

You can port your mortgage even if you’re over 50, but it may not be easy. You may be rejected if your lender has changed eligibility requirements or your income is expected to decrease at retirement.

5. Can I extend the term of my mortgage if I’m close to the age limit?

It may not be possible to extend your mortgage term if you’re close to the age limit. This is because most lenders will only allow you to do so until the upper age limits they’ve set.  

6. Can I get a mortgage if I have health problems?

Yes, you can still get a mortgage even with health problems. Your lender can’t discriminate against you based on your illness. As long as you can afford to make repayments, your application should not be rejected because of your health. 

7. Will I pay higher interest rates if I’m an older borrower?

Yes, there’s a chance you’ll be offered higher interest rates because you’re an older borrower. 

Lenders do so because they don’t want to take on too much risk when they lend to you. If you want the best deal possible, you should talk to a mortgage advisor. 

Age Limits For Mortgages In The UK Summary

Applying for a mortgage in your later years may be challenging, but not impossible. Many lenders nowadays are offering options specifically designed for older borrowers, such as Retirement Interest-Only mortgages.

You just need careful planning and a willingness to explore various options. Seeking expert advice will also go a long way to help you overcome the challenges of being an older borrower and find the best deal for you. Work with When The Bank Says No to help find the best mortgage deals for you.

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Emma Jones
Emma Jones
Emma began her career in Lloyds Banking Group, first in the unsecured & secured loans department at Halifax and later as a mortgage advisor at Lloyds. During 9 years in these roles and a further 2 years at Yorkshire Building Society, Emma was able to observe the impact of the recession, and how the banks let their customers down by denying loans and mortgages. Wanting to be a driving force for change, she stepped into a market advice role where she has been able to help clients when others couldn’t. Identifying a gap in the mortgage space, Emma went on to establish When the Bank Says No. As a keen property investor, she has been the focus of features in publications including The Sunday Times and This is Money. Emma’s greatest joy is overcoming the low expectations of their customers, many of whom have all but given up on getting a mortgage due. One thing Emma has learned through her own personal struggles is every client must be treated like a human and understood better by advisors and lenders in the industry. “We all have to navigate life events which can ultimately impact your financial status. It shouldn’t mean dreams of homeownership or business growth should have the breaks applied”. Emma and her team’s passion for helping people overcome the challenges they may face when applying for a mortgage have fuelled the success of When the Bank Says No.

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