As you enter your 60s and the next phase of your life, you may be wondering what this means for your mortgage and how you can make it work for you. In this article, we’ll discuss the process of applying for a mortgage over the age of 60, and the options available to you.
Can I remortgage over the age of 60?
While there is no universal upper age limit for mortgage applications, each lender has their own set of rules - whether that’s a maximum age limit at the time of application or the end of the mortgage term, or a requirement to prove affordability for the full length of the mortgage term.
The latter naturally becomes more challenging when your income reduces considerably as a result of retirement, but there are options available to you. A mortgage adviser will be able to save you a lot of time by helping you to identify which lenders will consider your application at this age.
What’s a retirement interest-only mortgage?
A Retirement Interest-Only (RIO) mortgage is generally aimed at individuals typically aged 55 and above, who are looking for a mortgage during their retirement years. A RIO mortgage is useful for those seeking to improve their retirement finances, or meet specific financial needs. Monthly repayments will be lower, as you’ll only cover the costs of the interest on the loan.
The outstanding capital from the loan is only paid off in the event of your death, moving into long-term care, or when the property is sold. All you will need to do to qualify is prove that you are able to afford the monthly interest repayments.
Is a retirement interest-only mortgage right for me?
As with any mortgage product, there are pros and cons that ultimately depend on your individual financial circumstances and goals. You must carefully consider your financial situation and long-term objectives before committing to a retirement interest-only mortgage.
On the one hand, a RIO can ease any financial burdens you may have due to the lower monthly repayments. They also have no fixed term, so, provided you consistently meet your payments each month, you are able to stay in your home indefinitely without needing to sell.
At the same time, there are drawbacks, as your loved ones may lose any potential equity you have in the home due to the fact it is sold to cover the capital once you are no longer in a position to own it.
Quality mortgage advice
When it comes to remortgaging at this stage of your life, you’ll find that more lenders are willing to lend than you would presume. It’s all about finding the right lender who understands your financial needs and is willing to work with you to achieve your homeownership goals. By speaking to an adviser that specialises in retirement mortgages, you will be able to shop around for a deal that suits your individual circumstances.
If you’re over 55 and want to discuss your mortgage options, get in touch with one of our expert advisers today. They’ll be able to work with you to tailor your application directly to meet your specific needs.
Important information
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
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