In this brief guide, we are going to answer the question “Does age affect mortgage term?”

Does age affect mortgage term?

Yes, your age does affect the mortgage term as most mortgage lenders will have a maximum age that they will want you to be at the end of the mortgage term. This means if you will be beyond this maximum age you may not be able to get a mortgage.

They only time a mortgage lender may restrict these terms is if you are able to prove that you can indeed continue making the monthly mortgage repayments even beyond the mortgage lenders maximum age.

As you may be able to tell from the above paragraph, the man reason why age affects the mortgage term is that a mortgage lender will want to see that you still have sufficient savings or earnings to continue to be able to make your monthly mortgage repayments.

Most mortgage lenders will have a maximum age on when they will want the mortgage term to have ended by and this will usually be a few years after your retirement age.

If you will be above the mortgage lenders maximum age then below are some of your options:

  • Ask for a shorter mortgage term
  • Increase your mortgage deposit to reduce your loan to value
  • Ask the mortgage lender to review your affordability
  • Get a co-buyer
  • Find a specialist mortgage broker

Ask for a shorter mortgage term

The easiest or most straightforward thing you may be able to do if you are concerned on whether your age will affect your mortgage term is to get a shorter mortgage term.

A shorter mortgage term will ensure you are below the mortgage lenders maximum age requirement when your mortgage term ends but it may also increase your monthly mortgage repayments and therefore make the mortgage unaffordable for you.

This could mean you fail your mortgage affordability tests and are not offered a mortgage.

Before asking for a shorter mortgage term you should speak with your mortgage broker to discuss your circumstances and receive independent financial advice.

Increase your mortgage deposit to reduce your loan to value

Another thing you could do is to reduce the loan to value and by default reduce the mortgage lenders risk.

Some mortgage lenders may be willing to consider giving you a mortgage which will end beyond their maximum age limit if you put down an increased mortgage deposit than required.

There is no guarantee that the mortgage lender will be more willing to lend to you due to this but as it will reduce their risk on the mortgage you may be able to get a mortgage offer fro them on this basis.

Ask the mortgage lender to review your affordability

Another option which you could use is to ask the mortgage lender to review your mortgage affordability by assigning your mortgage application for manual underwriting.

The reason why manual underwriting may work better for you is that most mortgage lenders will usually carry out their initial decision on your mortgage application made by an automated computer decision system.

This means that a mortgage lender could mark your mortgage as not meeting their mortgage lending criteria simply due to your age without assessing your true mortgage affordability?

Get a co-buyer

Another way to prevent your age from affecting your mortgage term is by getting a much younger borrower who will still be beneath the mortgage lenders maximum age at the end of the mortgage term.

Some mortgage lenders may consider these type of mortgage applications as they may use the younger borrowers age when considering your mortgage affordability.

Find a specialist mortgage broker

Specialist mortgage brokers may be able to help you find mortgage lenders who are willing to lend to borrowers beyond a particular age.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.

This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. 

This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your mortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month.

It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.

Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.

They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

If a specialist mortgage broker is not able to help you then you will still have the option to use a conventional equity release mortgage.

In this brief guide, we answered the question “Does age affect mortgage term?”

If you have any questions or comments please let us know.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.