If you already own a property, you’re in a stronger position as the equity built up in that property can be used to secure a separate mortgage or, it can be drawn down through retirement products like equity release. Or perhaps you’ve never bought a home before and you’re one of the many over 50s first-time buyers?
Getting a mortgage over 50 is more common than you might think but before you sign a contract that could constrict your future finances, weigh up your options, find the most affordable deal and have a trusted and reviewed expert check your agreement.
With that in mind, this guide has been created to provide clarity and includes the information you need to make an informed decision about getting a mortgage aged 50 and over.
Why would someone want a mortgage over 50?Some common reasons for getting a mortgage at 50 include to:
- Purchase a property as a first-time buyer
- Downsize to a smaller property
- Upsize to a bigger or more expensive property
- Make some long-awaited home improvements
- Invest in a buy-to-let property
- Boost finances in retirement
- Fund a once in a lifetime holiday or car purchase
- Help a loved one onto the property ladder
A mortgage broker works to find you the most affordable and viable route for finance. How you enjoy the money is up to you.
Is it too late to buy a house after 50?No! If you're in your 50s, it's not too late to buy a new home, but it is important for your financial future that you compare a wide range of products and lenders to find a deal that will be affordable throughout the course of your mortgage.
Keep in mind that lenders will focus on your ability to repay your loan now and in the future. It can help to plan how you’ll repay the mortgage if you were to fall ill, need to reduce your hours or retire early.
While there are insurance products like critical illness cover and mortgage insurance, which reduce the risk of falling behind on repayments, lenders will still want to be reassured that your affordability is good for the size of the mortgage, as well as the interest and any additional mortgage fees.
Reducing the mortgage amount or getting the mortgage over a shorter term so that you pay less interest, can help to improve your chances of getting approved for a mortgage if you’re 50+ but ultimately, it’s your ability to meet your chosen lender’s mortgage criteria that will determine the outcome.
Why is it harder to get a mortgage over 50?The closer you get to retirement, the harder you might find it to get a standard residential mortgage because some lenders expect that your income will fall once you retire.
If you were unable to work because of ill health or unexpectedly passed away before the mortgage was repaid, the mortgage lender could lose money as there is no guarantee that the property would sell for enough to cover the loss.
Upper age limits reduce the risk of this happening because a younger borrower is less likely to become ill or pass away before the mortgage term comes to an end.
What is an upper age limit for a mortgage?Some banks and building societies have an upper age limit for their lending and these ensure that borrowers won’t reach a certain age and still owe on their mortgage.
This typically involves a maximum age for taking out new mortgages (usually 70) and another age limit for paying them off (between 70 and 85).
Hypothetically, if a 55-year-old applied for a mortgage of 25 years (which is the standard mortgage term) they would be 80 years old by the time the mortgage had been paid in full.
In the eyes of the lender, that could be a risk because the borrower’s ability to work and earn money to repay their mortgage could arguably decline as they age.
What can be included as income for an over 50s mortgage application?To prove that you have good affordability for the mortgage or remortgage amount you’re applying for, you’ll need to evidence sustainable income.
- Company pension forecast<
- Annuity statement
- State pension statement
- Earnings from self-employment
- Income from full-time or part-time employment
- Sustainable income from buy-to-let investments
Self-employed mortgages for over 50sSelf-employed borrowers are widely accepted by UK lenders, so don’t worry if your income derives from freelancing or a limited company.
Having contracts for the future can help to show that you’re trading successfully with a stronger ability to repay on time and in full and most lenders also require a minimum of one year of SA302s, though many ask for 2+.
If you have comprehensive information about your income, you should be able to get a mortgage on the same terms, or similar terms, as someone in full-time employment.
However, if you have affordability issues like a low credit score or a high level of debt, the terms of your agreement may be more restrictive and you may also be charged a higher level of interest.
That’s certainly not always the case as lenders will look at your circumstances as a whole. Even if you’ve been rejected in the past, it may be worth checking your eligibility for a self-employed mortgage with a broker to find out where you stand now and which lenders would be willing to lend to you.
What do lenders assess when deciding to approve a mortgage for someone over 50?Your affordability for a mortgage or remortgage product will be determined by the usual factors like income, credit history and your level of debt but crucially, the type of mortgage product you decide to opt for will also affect your ability to get approved.
For example, if you were looking for a remortgage product or equity release, the amount of equity you have in your current property will greatly impact the decision and your choice of lenders.
In contrast, if you were to opt for a standard capital repayment mortgage, the sustainability of your income would likely be assessed closely, especially if you’re over 50 and closer to retirement.
What mortgage products are there for over 50s borrowers?The good news is that with an ageing population and more people working beyond the statutory retirement age, there are lenders with mortgage criteria that are inclusive of borrowers aged 50+.
You just need to locate them.
That’s where the help of a mortgage broker can be key.
They work to find the type of mortgage product that’s right for you, based on your circumstances and what it is you’re looking for from a mortgage.
Regardless of the product or your financial situation, a good mortgage broker will always compare mortgage interest rates and read the terms and conditions to compare the cost of any associated fees.
Mortgage products available for over 50s
Standard capital repayment mortgage(SCR)
What is it?
Benefits of an SCR mortgage
Things to consider carefully
Also known as a residential mortgage or home loan. When you repay your mortgage, you’ll be required to pay for the capital of the loan, plus interest, though some mortgage agreements are repaid on an interest-only basis with a capital repayment at the end of the term.
This amount you owe will get smaller every month and, as long as you keep up the repayments, your mortgage will be repaid at the end of the term. The term is usually 25 years.
The repayments for this mortgage cover the capital, plus interest and this can be expensive on a reduced income, if applicable. If you fail to keep up with your mortgage repayments, your home could be repossessed.
What lenders provide mortgages for over 50s?High Street banks and lenders might not be able to offer the flexible criteria you need and while it’s always worth checking their deals, ideally you want to compare the whole of the market and that includes smaller, more niche lenders who don’t always advertise on comparison sites.
Searching for niche lenders and pinpointing the ones that are suitable for you takes time but it doesn’t have to be a chore. It’s a mortgage broker’s job to compare the market on your behalf using their access to banks and lenders to secure the most advantageous agreement.
Check reviews for mortgage brokers and then once you feel happy to let them start the search, they’ll work through the options and will then highlight the best deals based on information provided by you. If they think an agreement isn’t quite right for you, they should always let you know, putting your needs before their own interests.
How can I get approved for a mortgage if I’m over 50?Your current circumstances could provide you with the means to repay a mortgage and if you already have equity or a sustainable and substantial income in relation to the mortgage amount you’re applying for, you could have a plethora of options to consider.
If you have a clear plan for how you’ll pay the mortgage and you have a good credit score it may be possible for you to get a standard residential mortgage with a 25-year term.
Of course, the shorter your mortgage term, the less interest you’ll probably pay overall. Opting for a shorter mortgage term can help to improve your chances of getting approved in some circumstances, especially if you’re closer to retirement.
It can also be helpful to save a larger deposit as this demonstrates a level of commitment at your end, and reduces the risk to the lender as you’ll be borrowing less.
Over 50? Ask a mortgage broker to check your eligibility for a mortgageIf you’re looking for a mortgage that could take you into retirement, we can help.
- We can quickly tell you if you can get a retirement mortgage and recommend the best product for your needs.
- We liaise with all the relevant parties and manage your entire mortgage application, to ensure it is a complete success.
- We’re regulated by the FCA.
- Any conversations you have with our team are confidential.
Call, complete a quick online form or make an appointment to visit our head office for reliable help you can depend on.
Mortgages for over 50s: FAQs
Can I get a buy-to-let mortgage if I’m over 50?The majority of buy-to-let lenders have maximum borrower ages at the time of application between 75-80, although a handful of lenders might allow you to reach 85 depending on your circumstances and ability to meet their criteria.
Therefore getting a 25-year buy-to-let mortgage may well be possible if you’re 50. Typically, as you get older you're likely to be offered a shorter repayment period on a mortgage than a younger borrower would.
Most buy-to-let mortgages are interest-only, which means that the capital balance of the mortgage is due at the end of the term.
Buy-to-let landlords often prefer the flexibility and smaller monthly payments that an interest-only mortgage can provide.
If getting an interest-only mortgage proves difficult, you might consider retirement interest-only (RIO) mortgages.
What is the oldest age to get a mortgage?While there is no maximum age for applying for a mortgage, each lender has its own age mortgage age limit: Typical age limits can be:
When you take out the mortgage: Usually a maximum age of 65 to 80.
When the mortgage term ends: Usually a maximum age of 70 to 85.
I’m approaching the end of my career, can I get a mortgage?It’s not impossible as some lenders will include your income from pensions, savings, investments or even a part-time job if you plan on working occasionally during retirement. If your income is due to take a drastic dip after retirement and the difference would make your hypothetical mortgage unaffordable, it may be difficult to get approved.
That scenario isn’t representative for a lot of borrowers though, so contact a mortgage broker who can take the time to learn about your circumstances and what you need from a mortgage agreement and then find a lender with criteria and terms that specifically match that.
There are also a number of other options that could be available to you as a borrower nearing retirement, though the range of options will vary depending on whether you’re a current property owner with equity, the size of your income, the size of your deposit, your age and the level of debt you have