Can you get a mortgage in retirement?

21 December 2021

Wanting a mortgage later in life 

Unless you’re one of the few people who have the capital necessary to buy a house outright, it’s very likely that you’ll have to rely, in part, on a lender to help you move house. Although buying a house is often thought of as something you might do earlier in life, there are many reasons why people over-55 might look to move house as well: 

Whatever your reasons for wanting to move, or acquire additional property, you may be faced with the question, how you can I make the numbers stack up to afford it?’ Luckily, there are a number of options available that can be used to support you financially.

Can you get a traditional mortgage? 

If you bought your first home, it is likely that you relied on a traditional mortgage with a bank to help you acquire it. In a traditional mortgage, the bank lends you a certain amount and you make monthly repayments to pay back the money you owe them, plus interest. 

Whilst the bank may be willing to lend in certain situations to people over-55, many people in this age category will be precluded from acquiring a traditional mortgage as lenders will have an upper age limit, meaning that the end of your mortgage cannot go beyond this point. Equally, even if the bank will be willing to lend to you, you might be reluctant to take up a mortgage where you will likely be making repayments in retirement, as it might put stress on the money you have to maintain your standard of living once you have finished working.

How equity release might be a solution

If you don’t qualify for a traditional mortgage, or you’re worried about keeping up with monthly repayments, then equity release may be an ideal option for you. Many homeowners over 55 have accessed lifetime mortgage plans, which can give them the right amount of financial support needed to purchase their dream homes. A Lifetime Mortgage is a loan against the value of your home and can be taken as either a lump sum, a monthly income or both. No capital and interest repayments are made until the property is sold. Instead, the interest is rolled up and added to the total amount of the loan (but interest payments can still be made if desired).

Re-mortgaging with equity release 

Equally, a lifetime mortgage might be a good idea for you even if you’re not looking to move out of your existing property. Re-mortgaging with a lifetime mortgage may give you the benefit of being able to pay off your existing mortgage, meaning you’ll no longer have to make monthly payments. Instead, any debt to your lifetime mortgage lender would be collected, should you need to move into long-term care or pass away. 

If you want to learn more about whether you qualify for a lifetime mortgage, either to move home or to re-mortgage, then please get in touch. 

Safe consultations: socially distanced, over the phone or by video call – we are happy to hold our initial free consultations however you feel safest, in line with current guidelines.

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