Mortgages for Older People

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The 3 Types of Mortgages for Older People 

Bespoke Mortgages for Older People Advice 

High street mortgage lenders will usually have an upper-age limit for their mortgages within their lending criteria.

However, if you are looking for mortgages for older people, there are many later-life lenders, offering lifetime or very long-term loans for almost all situations.  This provides peace of mind for our older customers that their home is safe throughout retirement.

Here are the main enquires we receive for mortgages for older people: 

• Purchasing a new home. 
• Downsizing options.  
• Guarantor mortgages with family. 
• Paying off an existing mortgage that is ending. 
• Repaying debts using built-up equity. 
• Funding for home improvements. 
• Equity release as a lump sum. 
• Supplementing retirement income with equity release.  
• Complex situations?  

Being an independent broker, specialising in mortgages for older people, we will listen to your personal situation and understand your wishes to recommend the best, most cost-effective way forward. 

The 3 Types of Mortgages for Older People 

In the UK, there are 3 main types of mortgages for older people available, these can all be used to purchase a new property, repay an existing mortgage, or release equity.  Here is some further information on your options:  

1. Traditional mortgages for older people are available via high-street lenders.  These typically run to age 70 to 85, however, there are more lenders entering the market offering longer-term solutions such as the ability to take out a 40-year mortgage at age 60. 

2. Retirement interest-only mortgages, often called a RIO (Retirement Interest Only) mortgage, run for your lifetime or until you, or the second applicant if a joint application, enters long-term care. These work well when there is a good income available, from both applicants if joint, from pensions and other sources.   RIOs are assessed in a similar way to traditional mortgages on affordability, credit scoring, and the minimum age for one is 55.  

3. Equity release mortgages, there are two types of equity release mortgages available for older people in the UK, these are a lifetime mortgage, which is the most used, and home reversion plans.    

Lifetime mortgages for older people will ensure you and your partner have a right to live in your property until the second one of you dies or enters a care home long term.

You will require a fair amount of equity if you are looking to release tax-free cash, or a large deposit if you are looking to purchase a new property using a lifetime mortgage solution.  The monthly payments are optional and if affordable, can help keep the interest costs to a minimum and help you keep a bigger percentage of equity over the longer term.

Home reversion plan mortgages for older people are rare and involve selling your property to a lender but maintaining the right to live in your home until your death or you are entering long-term care, this would apply to the second applicant if a joint application.  

Bespoke Mortgages for Older People Advice 

It is important that all the above types of mortgages are explored by your later-life mortgage broker to ensure that you are not paying more interest than you need to be.

Proceed with caution as mistakes in this market can be costly if done wrongly.   Independent experienced later-life mortgage brokers will not have the ability to compare all options for you in-house to recommend the best solution.

Here, we offer a bespoke mortgages for older people service and advice team to find the most cost-effective solution for your needs, saving you both time and money. 

Written by
Dan Osman
Head of Later Life at UK Moneyman Ltd.
CeMAP & CeRER Qualified

29th April 2024

Date Last Edited:

About the Author

Dan Osman

Head of Later Life at UK Moneyman Ltd.

Dan joined the Financial Services sector back in 2002, but actually left the industry in 2008 before returning some years later. During the in-between years, he took a degree to become a Social Worker specialising in working with vulnerable adults.

Upon his return, Dan combined his experiences in the two sectors to become an Equity Release Specialist and he now heads up UK Moneyman’s Later Life Lending proposition. He genuinely believes in a holistic approach and always ensures his clients receive a proper consideration of all the options available, including non-lending alternatives to Equity Release.

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