Can you get a mortgage if you are over 60?
Yes, of course you can, it’s plain and simple. There are a few key things to take into consideration though as the requirements are slightly different, to say if you were still a ‘twenty something’, but not all too dissimilar.
What’s the lender looking for?
The main consideration the bank or building society will want to see is firstly that you can repay the mortgage, this is true regardless of age – sounds fair so far. But where this differs for over 60’s is that if you choose a repayment term past the point at which you are planning to retire they will require that you still have enough income to make the repayments. For example Barclays actually states that on their website. This isn’t a big deal and the lender is usually satisfied with income from a pension(s) or savings. We are going to break this down from here into 3 points for clarity.
Option 1 – Mortgage Fully Repaid Before Retirement
Most mortgages are 25 to 30 years in length. This is generally where the stigma around getting a mortgage if you are over 60 comes from. People think that no one will lend to them due to their age. Actually this used to be the case years ago, banks and building societies were hesitant to lend to anyone over 50, let alone 60 years old.
So what’s changed?
Well in came more flexible and shorter term mortgages. For instance if you are 60 and plan to retire at 65 so many banks and building societies have mortgage products to offer to you. With so many of us now working past our ‘retirement age’ it’s actually become really quite easy to obtain a mortgage with a high street lender.
OK, so a mortgage term of around 5-10 years will make the mortgage repayments more than say a 25 year mortgage, that should be obvious; as you are paying back more but over a shorter period. But the fantastic thing about that is, the total amount of interest repayable is less. This will literally save you thousands of pounds and it’s something people are only starting to realise. A mortgage later in life, provided you have the income, can be more flexible, cheaper due to paying less interest and all done and dusted in just a few years. Incredibly now people are putting off getting a mortgage in their 40’s and 50’s, waiting until they have a better salary at work or a better income to take one out in their 60’s. Maybe you should join them too…
Option 2 – Mortgage Repayments into Retirement
OK so not a big deal, but as previously stated the lender will simply want to see that you have the means to repay the mortgage, it’s as simple as that. All income will count, from private or state pensions, income from investments like money invested somewhere or income from property.
Option 3 – Remortgaging for over 60’s
Remortgaging if you over 60 is typically done for a number of reasons
- Get a better deal for the remaining term of an existing mortgage
- Raising cash for things like, help loved ones with deposits, property extensions or large one off purchases
- Unlocking value in your home to pay for long term care
- Buying a second home
So What is The Best Mortgage for Over 60’s?
You actually have a number of options depending on your circumstances and everyone is different with varying levels of ‘financial comfort’ but without doubt one lender you should be looking at is Nationwide Building Society. They are really on the ball here and offer a fantastic selection of mortgages available to anyone from 55 to 84 years old [up to 94 years old if your a Nationwide Building Society member]
Nationwide’s ‘Standard’ Mortgages
Nationwide offer a variety of mortgages with excellent interest rates and are very flexible with their terms. For example it’s possible to borrow £125,000 [for a property purchase of £250,000] over 5 years and the repayments are circa £2,200 per month.
Why Nationwide are really fantastic though is if you aren’t looking for a standard mortgage and want something a bit more ‘specialist’ they offer specific products under their ‘borrowing in later life’ range. See more details below.
‘Borrowing in Later Life’ with Nationwide Building Society
Retirement Capital & Interest Mortgage
Works like any other standard repayment mortgage would – you repay the interest and the capital on a monthly basis. This option is great for anyone looking to borrow up to a higher age.
A ‘Lifetime Mortgage’
This is Nationwide’s version of Equity Release, but before you frown and say equity release is expensive or this or that, let’s run through the facts as I think you’ll be pleasantly surprised. Yes it’s true equity release has a stigma attached to it and probably rightly so, it used to be very expensive, offered by some unscrupulous companies and if it went wrong, which it did, people could lose their homes. So, thankfully, Nationwide came up with something far far better.
Their version allows you to unlock some much needed cash from your home but it works more like a loan rather than a ‘mortgage’. You don’t need to make monthly repayments either, unless you want to and the loan is only repaid after the last borrower dies, moves into long term care or the property is sold.
This option is great for anyone wanting to release some cash from their home but who also wants to remain living in their home, rather than selling up and moving.
Can over 60’s get an interest only mortgage?
It’s slightly more difficult with high street lenders than a ‘capital repayment’ mortgage but it is possible and is offered again by Nationwide and Halifax.
Nationwide ‘Retirement Interest Only’
A retirement interest only mortgage works much like a normal interest only mortgage but has a couple of slight differences. It’s great for anyone that wants a mortgage with lower monthly payments, as interest only mortgages are cheaper than traditional ‘capital’ repayment mortgages. This means the income requirements, to be approved, aren’t as high as you only have to prove you can afford to repay the interest. The main part of the loan is usually only paid one when the last borrower dies or moves into long term care.
More Mortgages for over 60s
Standard Halifax Mortgages
- Fixed term mortgages – perfect if you want it paid off before a certain date, like your retirement.
- Flexible repayment options – you could choose to just pay the interest each month and then pay the full amount back at the end of the term.
Retirement Interest Only [R.I.O] Mortgages
- As the name suggests you will only pay the interest each month not the loan itself. This will mean the total amount you have borrowed won’t increase over time. Great if you want to know exactly how much you owe and know that it wont go up over time.
- Interest only repayments are less than standard capital repayment mortgages so the monthly payment will be less – improving your cash flow!
Two HUGE benefits of a R.I.O mortgage
- There is no fixed repayment date for the balance – so perfect if you need flexibility
- The loan is only repaid when you die or you move into long term care