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Mortgages for over 70s
Can I get a mortgage if I’m over 70?
Yes, if you’re over the age of 70, it’s still possible to get a standard mortgage. As life expectancy continues to rise and people retire later in life, lenders are becoming increasingly flexible and many have extended their maximum mortgage age limit to reflect this.
There are also specialist mortgages aimed at older borrowers that can offer an alternative option and help you borrow funds to buy a new home or borrow against your existing property.
Maximum mortgage age limits vary depending on the provider – some lenders have no maximum age limit. Others require borrowers to have repaid the mortgage by between 75 and 95.
This means you may have to accept a shorter mortgage term of perhaps 10 years rather than the standard 25 years. The reduced term results in higher monthly repayments.
The key to getting accepted for mortgages for over 70s is to convince the lender you can afford your repayments on your income.
Other mortgages for pensioners over 70 include retirement interest-only mortgages, which only require you to repay the interest each month. The loan is then repaid when you die or move into long-term care.
There are also equity release schemes, such as lifetime mortgages that require no monthly repayments. With these, the loan and interest are repaid when you move into care or pass away.
Another option is a home reversion plan, which allows you to sell all or part of your home in return for a lump sum or regular payments. Some lenders also offer buy-to-let mortgages for over 70s.
What mortgage options are available for over 70s?
There are several different mortgages available if you’re over the age of 70. Which mortgage type is best for you will depend on your attitude to risk and the reasons you want a mortgage, such as:
To move home
To improve your existing property
To release cash tied up in your home to give you some additional income in retirement
Below are the four main mortgage options you can choose from.
Standard mortgages for over 70s
An increasing number of banks and building societies offer standard residential mortgages to those aged 70 or over. These are suitable if you’re looking to buy a new home or remortgage to a better deal.
Bear in mind, however, that because you’re older, you may not qualify for a standard 25-year term – you may have to accept a loan over 10 to 15 years instead. This means that your monthly repayments will be higher so you need to show your lender that you can comfortably afford these.
The majority of mortgages are offered on a repayment basis, where you repay a portion of the capital (the amount borrowed) as well as interest each month. Providing you keep up with your monthly repayments, your mortgage will be paid off by the end of the mortgage term.
Some lenders might also offer interest-only mortgages, where you only repay the interest each month and repay the capital at the end of the mortgage term.
Retirement interest-only mortgages for over 70s
There are also specific interest-only mortgages for over 70s, known as retirement interest-only mortgages. These are designed to help older borrowers who don’t qualify for a standard residential mortgage and work in a similar way to traditional interest-only mortgages.
The loan is secured against your home and only the interest, not the amount borrowed, is repaid each month. However, unlike a standard interest-only mortgage, the loan is paid off when you die or move into long-term care. You only need to prove that you can afford the monthly interest payments, not the amount borrowed.
A retirement interest-only mortgage can be used to pay off an existing mortgage or release cash to increase your income in retirement. It’s also possible to move home with a retirement interest-only mortgage.
Some deals also let you pay off some of the capital each month, along with the interest, which will help reduce the total amount owed and ensure that more of your property can be left to your loved ones.
Equity release schemes
If you want to access some of the cash tied up in your home (the equity), you might want to consider an equity release scheme. There are two options to choose from:
Lifetime mortgage
Home reversion plan
Lifetime mortgages are available to those aged 55 and over and are secured against the value of your property. You do not have to make any monthly repayments. Instead, the loan, plus interest, is repaid when you move into long-term care or pass away.
Alternatively, with some lifetime mortgages, you can choose to pay off some of the interest each month, reducing the overall cost.
With a home reversion plan, you sell all or part of your home at a below-market value for a lump sum or regular payments. You can stay in your home until you die or move into care, as long as you maintain it.
Equity release can have significant implications for tax, benefits and inheritance, so it’s best to seek financial advice first.
Older People’s Shared Ownership (OPSO)
The Older People’s Shared Ownership scheme could be worth considering if you wantto downsize or your home is no longer suitable.
The scheme runs in England and is available for those over the age of 55 who are unable to purchase a home that fits their needs without assistance.
The scheme works in a similar way to the standard shared ownership scheme and allows you to buy any home that’s for sale on a shared-ownership basis (part-rent/part-buy).
Through OPSO you can buy a share of between 10% and 75% of the home’s value and pay rent on the remaining share.
You can buy more shares in your home as and when you can afford to, but unlike the standard shared ownership scheme, you can only buy up to 75% of the home. Once you own 75%, you won’t have to pay rent on the remaining share.
To qualify, your household must earn no more than £80,000 a year if you live outside London and no more than £90,000 if you live in London.
Why is it harder to get a mortgage over 70?
Getting a mortgage when you’re over 70 and a pensioner can be trickier simply because you may no longer receive a regular salary.
Even if you’re still working, retirement is likely to be just around the corner and lenders may be concerned about your ability to repay your mortgage.
Although you might receive income via your pension, it can be difficult for lenders to assess exactly how much you’ll receive and they may be more reluctant to offer you a mortgage as a result.
There’s also a higher risk of ill health as you get older, which means you may not live until the end of your mortgage term. This means that even if you are offered a mortgage, the mortgage term is likely to be much shorter and the interest rate may be higher to reflect this increased risk.
How can I increase my chances of getting a mortgage over 70?
An easy way to increase your chances of getting accepted for a mortgage is to have adequate proof that you can afford your monthly repayments. Lenders will want to see that you have sufficient income from your pension or other sources such as investments, including shares or a buy-to-let property.
Having a good credit score and showing you’ve borrowed responsibly in the past could also increase your chances of getting a mortgage once you’re over 70. Before applying, it’s worth checking your credit report for free using a credit reference agency such as TransUnion, Equifax or Experian.
If you spot any mistakes, get them corrected as soon as possible. It will also help to pay off debts such as credit cards and loans, as well as reduce your monthly outgoings where possible. Lastly, shop around and compare deals carefully as some lenders are more lenient than others.
Which lenders offer over 70s mortgages?
A number of high street banks and building societies will offer mortgages to those over the age of 70, but they will usually impose a maximum age limit for when the loan must be repaid - and this will vary.
Both HSBC and Santander set this limit at 75, while Halifax sets it at 80. Leeds Building Society accepts mortgage applications from borrowers who would be 85 at the end of their mortgage term, and the borrower must be no more than 80 years old at the time of application.
Loughborough, Suffolk and Cambridge building societies have no maximum age limit.
Mortgages for over 70s FAQs
Can I get a mortgage if I am retired?
Yes, you can, so long as you can prove to your lender that you can comfortably afford your monthly repayments, whether with your pension, or other income, such as investments.
Can I get an interest-only retirement mortgage?
Yes – these work in a similar way to standard interest-only mortgages, in that you only repay the interest each month, not the sum borrowed. They differ because the loan must be repaid when you die or move into long-term care.
How much can you borrow when you're over 70?
This will depend on factors such as:
Your credit history
Your loan-to-value (LTV) ratio
Your income and
Your outgoings
Those with a higher credit score, a higher LTV and a larger income are likely to be able to borrow more than someone with a poor credit score, low LTV or low income.
Could I get a buy-to-let mortgage over 70?
Possibly. In fact, some lenders offer higher maximum age limits for buy-to-let mortgages compared to residential deals and offer terms of up to 40 years. When assessing your application for a buy-to-let mortgage, lenders typically require rental income to be at least 125% of your mortgage repayments (on an interest-only basis).
What is the age limit for getting a mortgage?
This varies depending on the mortgage provider. Some restrict it to between the age of 70 and 95, while others have no upper age limit.
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