Older Borrower Mortgages
Lee and Neezam answer your questions on mortgages for older borrowers.
How do I better my chance of securing a mortgage as an older borrower?
Preparation is key, much like any mortgage application, but mortgages for old borrowers is a very specialist area of advice, so as early as possible you should speak to a professional or Mortgage Broker. They will be able to understand which route offers you the best chance, because a wrong turn can be a costly one.
Can you get a mortgage after you retire?
Absolutely, everyone has their own plan in terms of retirement. Some people decide to retire at the state retirement age, other people might decide never to retire. What tends to happen is mortgage lenders look at your intended retirement age and what they are comfortable basing affordability on. You certainly can get a mortgage, you just need to make sure you get advice and you’re going with the right lenders.
Should you use Equity Release?
Equity Release is another specialist area of advice, and it’s not for everyone. If it’s something you’re considering as an older borrower, you must really seek advice on it before attempting Equity Release.
Equity Release is a costly process and there are other routes for older borrowers. There are some big disadvantages, as well as advantages to Equity Release. If it’s not right for you, it can be quite costly, so seek advice first.
You will need to take legal advice before releasing equity from your home as Lifetime Mortgages and Home Reversion plans are not right for everyone. This is a referral service.
What is the age limit for getting a mortgage?
This tends to vary depending on the lender. A lot of lenders will want to make sure that the mortgage term doesn’t exceed age seventy or seventy-five. If it’s a joint application, it will usually be based on the older applicant.
Some lenders are willing to go up to the age of eighty at the end of the mortgage term but some lenders also have a limit on the maximum age you can be when you’re applying for the mortgage. This means even if the lender has an end of term age limit of eighty, they may not lend to anyone over the age of sixty, due to limited years to repay.
Not every lender has an age limit, there are a few building societies we have access to who are a bit more flexible and base their decision more on affordability than age.
Can I get a thirty year mortgage at age fifty-five?
It is possible, it depends on your employment type, your pension projections and maybe if you’ve got any investment income, so that you’re not relying on working until the age of eighty-five. Only a select few lenders would approve a thirty year mortgage term at age fifty-five, so it’s important to speak to a broker to access this type of flexibility.
Can I get a mortgage at sixty?
You can, so don’t write it off if you’re aged sixty, or even older than that. There are a couple of different options. Equity Release, also known as Lifetime Mortgages where you don’t need to make repayments, so the interest and repayments roll up until the end of the term.
There are also some lenders who don’t have maximum ages for standard mortgage products, so as long as you can satisfy the affordability criteria, you don’t necessarily need to go down the Lifetime Mortgage route.
Why can it be harder to get a mortgage when you’re an older borrower?
It mainly comes down to employment and income, and generally speaking a mortgage is twenty to thirty years. The older you are at application, the more likely you are to come into retirement and rely on pension income, which is usually lower than employed income.
It is difficult because there are not many lenders that are flexible with older borrowers, but the ones that are, are more willing to consider pension income and be more flexible with age restrictions.
Which lenders lend to older borrowers?
There are lenders, but it’s not straightforward to say who would lend without understanding an individual’s specific circumstances. Lenders are always reviewing and changing their lending criteria, so a particular lender that provides mortgages for older borrowers today might have changed their policy by the time this podcast airs.
There are some high street banks that currently don’t have maximum age limits on their lending, but even if you meet that lending criteria, they might then also require a larger deposit or impose a lending cap on the amount they’re willing to lend to you. It is really important, therefore, to have that initial chat with us, so we can understand your circumstances and then give you answers based on them.
What types of mortgages can you get as an older borrower?
Most types are available, there are some high street banks offering standard mortgage products such as Fixed-rate and Tracker-rate. Again, it’s something that depends on your particular circumstances.
How can a mortgage broker like Rebus can help an older borrower?
It’s never too early to pick up the phone to a broker and ask if it’s possible for you to get a mortgage, or how much can I borrow. There’s no obligation for you to then proceed with us, but at least you’ve got the answers to your questions.
Don’t accept no for an answer if you apply to a bank that tells you that you’re too old, because you might not be the right client type for that bank, but there are so many lenders out there that that would and potentially lend to you. Speak to a broker and don’t hesitate to speak on the phone and do that as early as you can.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS
What services does a mortgage broker offer?
Our core service is to find a good mortgage deal and help you navigate the home buying process. Where we really add value is where we provide a ‘recommendation call’, where we provide our advice and recommendations for the specific mortgage, but also for protection as well.
We talk to you about protecting your income against loss of earnings, if you couldn’t work because of illness or injury. How would you pay the mortgage and your bills? We can also help you choose a solicitor and get a survey done, and find home insurance for buildings and contents.
A lot of people appreciate the general support we provide on the property purchase. Even if you’re an experienced home mover, it’s good to have more clarity on the next step in the process. We also help by liaising with estate agents, your solicitor and the lender. We will check you have the documentation you need on time, too. In addition, we help people with Buy to Let properties and all the responsibilities of being a landlord.
When should I see a mortgage broker? At what stage in the process?
We always encourage anyone to speak to us as early as possible. Even if you’re just starting to think about buying a property, it helps to know what you need to aim for and when you’ll be ready to start looking. We talk to people every day who aren’t actually in a position to buy yet – they don’t have their full deposit ready or don’t know how much they can borrow.
We can help put a plan in place: suggesting the deposit you need or setting your property budget to keep your monthly payments affordable. We also help people understand things like stamp duty and why you need a solicitor.
An initial call with us might last 30 minutes, and it’s an informal chat to explain the process, how much you could borrow and the fees you could expect.
What makes Peterborough a good place to buy property?
Peterborough is a fast growing city – you just need to take a drive around to see many homes being built. There’s so much investment in the city centre at the moment and planned for the next five years, including a new University.
Peterborough has great transport links by road and train. It’s just 48 minutes to King’s Cross by rail and the city is right on the A1. It’s a great city to live in.
We’re Peterborough born and bred, this is our hometown. We now know it really well, we understand the property market here and in the surrounding areas and we have relationships with a lot of different agents in the city. Clients really like the fact that we know so much about Peterborough as a place to live.
Tell us more about Rebus?
We launched the business in April 2019, so it’s a relatively new company, but as mortgage advisers we have a lot of experience. We both used to work together and, in fact, we went to school together!
We have very similar views on the property process, the market, the industry, and what’s important to us personally.
The reason why we set Rebus up stemmed from our personal experience of buying a home. Even as experienced mortgage advisers, it wasn’t easy. It was complicated. It was confusing. There’s so much jargon and you often feel like you’ve missed something or aren’t clear about the process.
So we wanted to make it easier for people to buy a home, especially First Time Buyers. It shouldn’t be as difficult as it is. And now we’re here to help and take some of that stress away. Just get in touch – we’ll love to help.
Some buy to let mortgages are not regulated by the Financial Conduct Authority.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS