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Can Pensioners Get a Mortgage?

Yes, pensioners can get a mortgage for purchasing a new home, repaying an existing mortgage that is ending soon, consolidate debts, or release tax-free equity for one reason or another. It is possible to get a regular mortgage until age 80+ or a retirement mortgage for your lifetime.  

Traditional mortgage lenders will typically have an upper age limit on their loans, however, there are lots of more specialist later-life lenders and products that offer much longer or for-life terms.

The four mortgage types available to pensioners are: 

  1. Traditional mortgages until age 85+. 
  1. Retirement interest only mortgages (RIO mortgages). 
  1. Lifetime mortgages
  1. Bridging loans.  

Traditional mortgages

A traditional mortgage can be a full capital repayment mortgage, an interest-only mortgage, or a part and part mortgage basis whichever works best for your situation.

There has been a lot of innovation with these in recent years and mortgages for pensioners are available until age 85 and beyond with some lenders. 

Retirement interest only mortgages

Proactive innovation in the over 50s sector has resulted in specialist mortgage products designed for pensioners that have the income available to pay a monthly mortgage payment throughout retirement.

These are available from age 55 and run for your lifetime, or when you enter long-term care, whichever is sooner.

Lifetime mortgages (equity release)

With a lifetime mortgage, monthly repayments are optional making them an excellent product for pensioners who are equity rich yet income poor. If you do have the income available but are struggling to qualify for a normal mortgage, then an interest only lifetime mortgage may be a solution.

Lifetime mortgages are available from age 55 and run for your lifetime, or when you enter long-term care, whichever is the soonest.

Bridging loans

A bridging loan is a form of short-term finance mortgages that can be useful when pensioners find a property and would like to move fast, i.e., without selling their current property.

Bridging loans will allow pensioners approximately 12 months to then sell their existing property and repay the loan.

We can help pensioners get mortgages for: 

Purchasing a new home

Often, pensioners contact us for mortgage advice as they are considering purchasing a new home. Popular reasons for this include moving closer to family, peace of mind that their home is secure in retirement and downsizing to a more manageable property.

The more deposit/equity you have available the more you will be able to borrow on a pensioner mortgage. Lending is based on risk, therefore, the bigger the deposit or equity you have available the lower the risk to the lender.

Right to buy

If you have been renting your property from the council or housing association for a long time, as you approach retirement you may wish to consider taking advantage of the right to buy, this is where you buy your property, for a generous discount, from from the council.

The right to buy is popular for pensioner mortgages where the property is shared with family members. Often, the older applicant can take out a mortgage on their own, if for any reason unable to qualify, we have mortgages with family member solutions available.

Repay an existing mortgage

Having an outstanding mortgage on your property can be a stressful and worrying and worrying situation for pensioners. Your existing lender will start writing to you a few years before you must repay the loan, if you do not want to sell your property or do not have funds available, then you will need to explore pensioner mortgage options.

If you have enough cash available or built-up equity, we are often able to find solutions to extend the term or remortgage to a lifetime product.

Leaving plenty of time is important when it comes to the end of your mortgage term; we usually recommend at least 12 months before to get alternative funding in place.

Consolidating debts

Reducing your outgoings in retirement is often a priority when considering mortgages for pensioners. 

Often, customers can feel stuck in a tricky situation paying the minimum payment and not seeing the debt balance reduce causing stress and worry. The good news is that there is a fantastic range of mortgages for over 60s available to help.  

When considering a debt consolidation mortgage, you should think carefully about taking currently unsecured debts and securing these against your home, in the event of non-payment, your home will be at risk of repossession. Our team will discuss this in more detail with you to ensure you understand the pros and cons involved.

Release tax-free cash

In lots of circumstances, pensioners can end up being asset rich and income poor which can lead to a poor lifestyle, especially when everything is increasing in price. This can lead to little disposable income to enjoy retirement.

If you have been a homeowner for a long time, you may have accumulated a significant amount of equity in your home. The pensioner mortgage options that are available in the UK allow you to release this either as a lump sum or smaller chunks.

This cash can then be used for a large purchase such as a motor home etc., or in smaller chunks to supplement your pension income if a lump sum is not required, or even a combination of the two. This cash-injection will hopefully provide you with a better quality of life or help fund help and support you need with your health and property maintenance.

If you are a pensioner considering your mortgage options, then our experienced and knowledgeable team are at the other end of the phone ready to help.

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Registered Address: 10 Consort Court, Hull, HU9 1PU.

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