Am I Too Old to Get a Mortgage?
16th March 2023 posted in Buyers
Getting a mortgage can be daunting, and it’s even more of a challenge if you’re worried about your age and wondering, am I too old to get a mortgage? Do lenders have the oldest age to get a mortgage? At Hunters Estate Agents, we understand that each case is different but there are specific guidelines that lenders follow when assessing how much someone can borrow based on their age and we're here to shed some light on getting a mortgage later in life.
Am I too old for a mortgage?
The answer is no, but the amount that you can borrow will depend on factors like how long you plan to stay in the property or what type of property you want to purchase. As you get older, lenders may offer lower maximum loan amounts or even require the mortgage term to be shorter, so you must talk to your lender about what they can do for you based on your circumstances. It's important to remember they will also conduct affordability checks taking into account your future plans.
So, what is the oldest age to get a mortgage?
Generally, lenders prefer if people are under 75 years old when they take out their mortgage, although some lenders will consider applications up to the age of 80 or 85.
Things to consider when applying for a mortgage over 50
1. Smaller mortgage/amount borrowed
If you are over 50, lenders will usually review your ability to repay the mortgage in a shorter amount of time than they would if you were younger. This means that lenders may be more likely to offer a lower loan-to-value ratio (LTV) and therefore a smaller amount.
2. Length of the loan term
It is also important to consider how long you plan to stay in the property as this can impact your eligibility for a mortgage at older ages. Most lenders require mortgages with shorter terms so if you are looking for a longer term then it’s worth shopping around for lenders who are prepared to offer these types of mortgages.
Increasing your chances of getting a mortgage over 50
If you are concerned about your age affecting your eligibility then don’t worry, there are things that you can do to improve it.
To increase your chances of being accepted, there are ways to improve eligibility over time:
● Maintain a good credit score and keep debt levels low
Keeping track of your credit history and ensure that you’ve made regular payments on time will help to boost your score and make you look more attractive to lenders.
● Save more
Having a larger deposit will help to reduce the amount of money that you need to borrow, which can make it easier for lenders to accept your application.
● Consider alternative financing options
You may also want to consider getting a guarantor mortgage which is when someone else agrees to cover the repayments should you fail to meet them.
What mortgages are best for over 50s?
1. Interest-only mortgage
An interest-only mortgage allows borrowers to make lower monthly payments by only paying off the interest on the loan. However, it is important to have a solid plan in place for repaying the principal when the mortgage term ends.
2. Lifetime mortgage
A lifetime mortgage allows homeowners to access the equity in their property without having to sell it. This can be useful for those who want to supplement their retirement income or fund home improvements.
3. Specialist mortgages
Some lenders offer specialist mortgages for older borrowers that take into account factors such as pension income and affordability based on expected retirement age.
Overall, getting a mortgage at an older age is possible and the good news is that lenders may even offer lower rates in comparison to younger borrowers due to their financial stability and good credit history.
Remember to get professional advice from a qualified financial advisor before making any decisions about which type of mortgage is best suited for your needs and circumstances. To help understand the types of mortgage you may be eligible for, check out our mortgages made simple page.
If you're looking for a new mortgage because you want to downsize following retirement or move to a different area, then why not start the process by booking a free valuation with us today to find out how much your current home is worth?