Mortgage Options in Later Life
Getting a mortgage in your 60s and beyond is absolutely possible, though options differ from standard lending. Many lenders have maximum age limits at the end of the mortgage term, but others are more flexible, some with no upper age limit at all. For those looking to remortgage in later life, understanding your options helps you make informed decisions about your property and finances.
Your options may include standard residential mortgages with lenders who accept older borrowers, Retirement Interest Only (RIO) mortgages, or equity release products. The best choice depends on your income in retirement, your long-term plans, and what you want to achieve.
Retirement Interest Only Mortgages
RIO mortgages are specifically designed for older borrowers. Like traditional interest only, you pay only the interest each month - the loan is repaid when you sell the property, move into care, or pass away. The key difference is that affordability is assessed on your retirement income rather than requiring a separate repayment vehicle.
RIO mortgages can be useful for those who want lower monthly payments or need to remortgage an existing interest only mortgage that's reaching term. They provide a way to stay in your home while managing costs in retirement.
Lenders Without Maximum Age Limits
Several lenders have removed or increased maximum age limits, recognising that people are working and staying active for longer. Building societies often lead in this area - Family Building Society, Bath Building Society, and others have been notably flexible on age criteria.
When assessing applications from older borrowers, lenders focus on sustainable retirement income. Pensions (state and private), investment income, rental income, and even part-time employment income can all contribute to affordability calculations.
Equity Release Alternatives
Equity release allows you to access the value in your home without monthly payments. The loan, plus rolled-up interest, is repaid when you die or move into care. While this provides tax-free cash without impacting current income, it reduces what you leave to beneficiaries and can be expensive over time due to compound interest.
A RIO mortgage or standard mortgage may be more cost-effective if you can afford monthly payments. Our advisors can compare the options and help you understand the long-term cost implications of each approach.