Mortgages for pensioners: I'm over 65, can I get a mortgage?

While some lenders set their own maximum age limits, there is no age limit for applying for a mortgage, so mortgages for pensioners, including those over the ages of 65 and 70, exist.

The golden rule is the same as any mortgage: you need to prove you can repay the loan.

Why should I get a mortgage as a pensioner?

When you’re retired, there are many reasons why you might want to take out a new mortgage, or remortgage, including:

• Having the right home: During retirement, you may want to buy your ‘forever home’ or one that will suit your needs as you get older.
• Improve your current home: You may prefer to extend or adapt your existing home to meet your retirement needs, which may require extra money.
• Additional retirement income: You can use a special type of mortgage to release equity from your home to supplement your other retirement income.
• Pay off an interest-only mortgage: If you have reached the end of your interest-only mortgage term, you may need to remortgage to pay off the outstanding balance.

What is the maximum age limit for a mortgage?

There is no set rule for age limits on mortgages, but lenders tend to have a cap, which can vary.  

Lenders are trying to be more open-minded and consider that people are now typically living and working for longer. 

While some high street lenders will have no age limits to apply for a mortgage, you may struggle to get a competitive mortgage if you’re 75. 

You may also find it difficult to extend your mortgage term if you need to reduce your monthly payments, so make sure you can afford it.  

Other lenders may have age limits for when the mortgage has to be repaid in full, which is between 70 and 90. 

High-street mortgage providers tend to offer lower interest rates but may not be as flexible. 

Smaller lenders, like local building societies or private banks, can offer more flexible lending criteria, and some have no upper age limit. 

The interest rates may be higher, but a mortgage broker can help you access the best mortgage for your circumstances. 

Is it easy for a pensioner to get a mortgage?

For most pensioners, the short answer is no. 

Lenders will want reassurance that you have a steady income stream to make all repayments, which can be difficult to prove if you’re over 65 and soon to be a pensioner, but it is possible. 

You will need to show that your pension pot or other investments will be able to fund the repayments, and it can help to offer a defined retirement date. 

Some providers may request the current value of your pension pot. 

You can show them your workplace pension forecast, annuity statement or bank statement if you’re already withdrawing from your pension. 

Lenders will also want to know that you have a good credit history. 

It is vital to check your credit score before you apply for a mortgage to see if it can be improved.

What are the different mortgage options for pensioners?

Some types of mortgages are aimed specifically at older people, although you can apply for a standard mortgage – but your monthly repayments are likely to be higher.  

Below are the main ones: 

Retirement interest-only mortgage

This works similarly to an interest-only mortgage, so you only pay the interest each month, but you repay the outstanding balance once you die, go into long-term care or sell the house. 

Lifetime mortgage

This is a type of equity release product that lets you borrow a lump sum secured against your home, which you repay when you die, move into long-term care or sell your home.  

You pay interest on the amount you borrow, which will either compound over time to a lump sum you pay at the end, or you may be able to pay it off as you go to avoid it increasing. 

Learn more: the pros and cons of equity release

Home reversion scheme

This is another type of equity release product where you sell all or part of your property for a lump sum or regular income, but you can legally continue living in it until you die or move into long-term care. 

With a home reversion scheme, you will typically only receive up to 60% of the market value of your property, and it can be expensive.

Older Persons Shared Ownership (OPSO)

This government-backed scheme isn’t a traditional mortgage, but does offer a way for pensioners to buy a home. 

It allows you to buy a portion of a property and pay rent on the remainder. You can only buy up to a 75% share, and once you reach this threshold, you won’t pay any more rent. 

Home Ownership for People with Long-Term Disabilities (HOLD)

Just like OPSO, HOLD is a shared ownership scheme that lets you apply for properties that meet your needs. However, this option is only for those with a long-term disability who meet certain criteria.

How can I get a mortgage on a pension?

Your first step is to gather information on your finances. 

Get a statement from your pension or annuity provider to prove your long-term income. You should also check your credit score. 

Next, do some research about mortgages for pensioners. You will want to compare the age limits, interest rates, term lengths, fees, eligibility criteria and flexibility options of the various products. 

There are comparison sites to help you see what is available, but a mortgage broker can give you access to various lenders and help you choose the most competitive deal for you. 

You then need to apply for the mortgage you want. Avoid applying for lots of products as each application will appear on your credit history and could harm your credit score. 

A mortgage broker can take you through the entire process to help ensure you are successful. 

Get expert financial advice

Getting a mortgage as a pensioner may come with its challenges, but it's certainly possible with the right approach.

While age limits and repayment conditions vary by lender, many options are available, from retirement interest-only mortgages to equity release products.

The key is to demonstrate a steady income, maintain a good credit score, and thoroughly research the different mortgage types and their requirements.

With careful planning and a clear understanding of your options, you can achieve your homeownership goals and enjoy the financial freedom you deserve in retirement.

Let Unbiased match you with a qualified mortgage broker to explore your mortgage options and guide you through the application process.