What’s the maximum age for a mortgage?

There’s no set maximum age for when you can get a mortgage. But most lenders have their own age limits.

Limits might apply to:

  • your age when you take out a mortgage (normally 65 to 70)

  • the age you’ll be at the end of the mortgage (usually 70 to 85)

Most age limits relate to the maximum age at the end of a mortgage.

These are the age limits at the end of the mortgage term set by some of the big banks:

These age limits can make getting a mortgage tricky even if you’re middle aged.

For example, if you’re 45 you may struggle to take out a 30 year mortgage as you’ll be 75 before you pay off the loan if you don’t switch your mortgage.

That would make you too old for Barclays and RBS.

The good news is that some lenders, normally building societies, have no age limit at all.

Your retirement plans

Although most lenders state a maximum age at the end of the mortgage, they can also include a rule saying the mortgage must be paid off “by the stated age or retirement age, whichever is earlier”.

This rule is important because it takes into account your individual retirement plans. This might be state pension age, or earlier or later.

It means that if you plan to retire at 65, for example, your mortgage lender will want your mortgage paid off before then.

The average age to pay off a mortgage

The average age people expect to repay their mortgage is at 57, according to a survey by financial services firm Hargreaves Lansdown.⁷

The study also found that 1 in 6 homeowners will either be over 65 by the time they pay off their mortgage or they do not expect to ever do so.

Why is there an age limit on getting a mortgage?

There’s a maximum age for mortgage lending because lenders need to be sure you can afford to repay your mortgage.

Lenders have to follow the Mortgage Market Review (MMR) rules. This means they have to make sure you can keep up with repayments over the full term of the mortgage.

Mortgage lenders will assume that when you reach retirement age you’ll no longer be working and so you will not have enough income to make repayments.

However, you might continue working beyond retirement age. Or you may have enough pension or investment income to cover your mortgage payments.

Getting a mortgage as an older borrower

To get a mortgage as an older borrower you’ll need to prove that your income is high enough to easily cover the mortgage repayments for the length of the term.

Your income

If you’ve already retired you can show the lender evidence of your income.

If you have not yet retired, you can ask your pension provider to confirm your:

  • expected retirement age

  • current pension pot value

  • expected retirement income

You could also show the lender proof that you’ll have an income from other investments such as shares or property.

Your mortgage term

Another way to get a mortgage as an older person is to choose to repay it over a shorter length of time.

For example, if you’re 60 and want to take out a 25 year mortgage, you’ll be limited to lenders which allow the maximum age at the end of the term to be 85 or less.

But if you chose a 15 year term, you’d have a wider choice of mortgage lenders as you’d have access to all those who allow the maximum age at the end of the term to be 75.

However, repaying your mortgage over a shorter term would mean higher monthly payments.

Types of mortgages for older borrowers

Most older borrowers will be able to apply for mainstream mortgage deals.

There’s also 2 other mortgage types specifically for older people:

  • retirement interest only

  • equity release

Retirement interest only mortgage

A retirement interest only mortgage (RIO) is designed to help older borrowers who may struggle to get a standard mortgage. 

It could suit you if you already own your home and have equity in it. You might be remortgaging or downsizing, for example.

A RIO mortgage allows you to borrow against your property and only pay back the interest each month, but not the loan itself.

So you only need to prove to the lender that you can afford to pay the interest, not the capital as well.

The loan is usually repaid when:

  • you sell your property

  • you move into residential care

  • you die

Some RIO mortgages allow you to repay some capital as well as interest.

This will reduce the size of your loan over time, meaning that more of your property can be passed onto your loved ones when you die.

Equity release

Equity release is another mortgage option for older borrowers with equity in their property.

If you’re over 55, you can use equity release to unlock some of the value of your home. 

You can take it out as a lump sum or as monthly income. 

You could then use this money to help fund your retirement.

Your debt will be repaid when the house is sold or you die.

However, equity release can be an expensive way to borrow.

Lenders for older borrowers

In general, building societies and smaller lenders are more likely to lend to older borrowers.

These lenders will look at your individual case and decide whether to approve you for a mortgage.

According to the Building Societies Association, the following building societies don’t have an age limit for mortgage borrowers:⁸

  • Bath

  • Buckinghamshire

  • Cambridge

  • Chorley

  • Cumberland

  • Dudley

  • Harpenden

  • Hinckley and Rugby

  • Ipswich

  • Leek United

  • Loughborough

  • Marsden

  • Penrith

  • Saffron

  • Tipton & Coseley

  • Vernon

 If you want to do equity release, you’ll need to go to a specialist equity release provider. 

Mortgage brokers for older borrowers

It’s best to use a mortgage broker if you’re an older borrower, as they know the smaller lenders and building societies that are more likely to accept your application.

If equity release is a possible option for you, a broker may be able to recommend an equity release specialist for you to talk to.

Sources

¹ Barclays

² Santander

³ Nationwide

⁴ Lloyds

⁵ RBS

⁶ HSBC

⁷ This is Money – Will you be shot of your mortgage by 65?

⁸ Building Societies Association – Building societies' lending age limits and retirement interest-only mortgages

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