Getting a mortgage as a pensioner could be challenging due to the strict criteria most mortgage lenders place on income verification and future income.
In the case of pensioners, it couldn’t be truer.
The mortgage lender will be especially interested in where your current income comes from, how much savings you have, your pension,any assets you have, any equity you have in existing properties. and if you plan to go back into work in the future.
Most mortgage lenders will also want to know you have adequate insurance in place to cover the cost of our mortgage, should you be unable to pay it for any reason.
Aside from verifying your income as a pensioner, most mortgage lenders will also not lend to people who will be 75 by the time the mortgage term ends.
This means depending on your age you will find that most mortgage lenders will off pensioners mortgages with smaller terms.
This means your monthly repayments may be much higher than they will be if you had taken out a longer-term mortgage and in most cases, the increased monthly mortgage repayments make the mortgages unaffordable for pensioners.
A reduced mortgage term usually benefits mortgage borrowers as in most cases they will be paying less in mortgage interest as they are borrowing for a much shorter time.
Can pensioners get a mortgage?
Yes, you can get a mortgage as a pensioner but you will need to be aware of what most mortgage lenders may be looking for from you.
We tackle some of the main points mortgage lenders may be considering when thinking about offering you a mortgage as a pensioner.
Mainly a mortgage lender will want to know how you intend to repay your mortgage.
They will look at these places for your source of income or capital:
- Stocks and Shares
- Unit Trusts
- Investment Bonds
- Savings, including regular savings plans
- Other properties and assets you hold
How do you get a mortgage as a pensioner?
As a pensioner, you will need to be conscious of the above when trying to get a mortgage and this means you will need to be aware that:
- The mortgage lender may offer you a small mortgage term as a pensioner
- You may have much large monthly mortgage repayments as a pensioner
- You may need to put down a much larger mortgage deposit as a pensioner so you reduce the risk for the mortgage lender as they only have to give you a much lower loan to value.
- Mortgage lenders may not be willing to lend to you if you don’t have a reliable source of income such as your pension
- You may not be able to get a mortgage as a pensioner if you are almost 75 years old.
Can I get a mortgage if I am over 65?
Yes, you may be able to get a mortgage if you are over 65 but most mortgage lenders will likely want that mortgage to end by the time you are 75 so although you may be able to get a mortgage it may be limited to within 10 years and this might make the monthly mortgage repayments much higher than they would have been on a similarly sized 25 year mortgage.
There are also some mortgage lenders who don’t have upper age limits for borrowing so this means as a pensioner you may be able to get a mortgage from one of these mortgage lenders.
Going to a mortgage lender directly may not be the best option for you and a mortgage broker may be able to look into your case and advice you on more suitable mortgage options for pensioners than the options below.
- National Counties Building Society
- Harpenden Building Society
- Bath Building Society
- Metro Bank
- Dudley Building Society
- The Cambridge Building Society
Can I get a mortgage at 50 with no deposit?
There may be few mortgage lenders who offer a mortgage with no deposit if you are 50 but there are guarantor mortgages and as far as we are aware there is no age limit to get these mortgages.
Guarantor mortgages are mortgages where family members or friends guarantee that you will make your mortgage repayments.
They will usually have to put down some collateral or savings in place of you putting down a mortgage deposit and if you don’t make your monthly mortgage repayments or default on your mortgage then their savings or property could be held for longer or repossessed.
They are a certain type of mortgage known as a family springboard mortgage, they include mortgages from lenders such as the Barclays family springboard mortgage, the lloyds lend a hand mortgage or the post office family link mortgage.
There are also retirement interest-only mortgages and equity release schemes which you may want to consider if you are looking to fund a property with a mortgage and you are over 60.
You should seek independent advice from a mortgage broker when considering a mortgage as a pensioner.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.