Compare Mortgage Deals over 60
The issue mortgage lenders have isn’t so much the borrower’s age when they take out a mortgage (although you generally have to be at least 18), but the age they will be when it’s paid off at the end of the term. Most lenders state that the mortgage must be paid off by the time the borrower reaches 75, but almost all include a clause saying the mortgage must be paid off by retirement - which lenders generally view as at age 65 - unless the borrower can prove their retirement income.
However, in recent years, mortgage providers have begun to recognise that people are living longer and frequently working into their 60s, which is gradually leading to an increase in mortgage deal options for older borrowers.
Watch out for age limits
Despite this development, most banks still place a maximum age limit on their mortgage deals or specify an age limit by which the mortgage must be repaid. The upper age limit for new mortgage applicants tends to be between 65 and 70, depending on the mortgage provider – so if you are in your early 60s, you may not face too much of a problem in getting mortgage approval for your new home. Do remember, however, to check if your mortgage provider specifies a repayment age – many will ask for the mortgage to be repaid in full by the time you reach a certain birthday.
Proving your income
In order to take out a mortgage, you will need to prove that you have sufficient income to repay your borrowing. In your 60s you may be enjoying the first years of retirement, planning to retire soon, or you may still be working. Whatever your age, mortgage lenders will want you to fulfil certain criteria before they approve you for a mortgage. To maximise your chances of getting a mortgage over 60, you may want to consider the following points:
Think about whether you have sufficient income to borrow the amount you want
– this applies whether you are still working or have retired
Consider your existing debts and outgoings – do you have credit cards or loans to pay off?
Check your credit rating
– do you have a clean credit history, with no outstanding payments or country court judgments against your name?
Look out for specialist over 60s mortgage providers
There are some mortgages available, mainly through mortgage brokers, which are specifically designed with over 60s borrowers in mind. While you may be able to find a better over 60s mortgage deal than you would on the high street, do bear in mind that even specialist over 60s mortgage providers will want to see evidence of your ability to repay, and may ask for repayment in full by the time you reach a certain age.
How is an over 60s mortgage repaid?
There are various interest rate options available to over 60s who want to repay their mortgage, including:
Fixed rate mortgage - your interest payments are fixed for a set period of time (usually several years) after which you will be moved on to another rate
Standard variable rate mortgage - your interest will vary with your lender's mortgage rate
Tracker mortgage - your interest rate will move up or down by tracking an external rate, such as the such as the Bank of England Base Rate
Equity release – If you own your current home and are struggling to find a mortgage, equity release mortgages may be an option. Equity release mortgages differ from standard repayment mortgages and are not suitable for everyone. However, in certain circumstances, they may be an appropriate option. You will need to seek specialist independent advice if you are considering an equity release plan.