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Can pensioners get a mortgage?
In recent years, pensioners have seen a dramatic expansion in the variety of available mortgage products.
Pensioners now have many options for borrowing, whether you choose to carry on working or are contemplating retirement.
As a whole-of-market mortgage broker, at Teito, our team of experienced advisors have access to a range of deals open to pensioners, including those not available on the free market. Complete our online form today to get started or carry on reading to learn more.
Why would pensioners consider a mortgage?
There are several reasons why pensioners may consider getting a mortgage or additional finance.
Remortgaging to help children access homeownership
Some later life lenders may think about remortgaging their home to help their children to buy their first home. As the difference between property values and salary increases widens, it is tougher for first-time buyers to access the property market. While there are government schemes accessible to first time buyers, homeowning parents may decide to remortgage to support their children.
Buying a second home or holiday home
It is prevalent for later life lenders to remortgage their primary residence to buy a second home as an investment or a holiday home to spend quality time. With interest rates at record low rates, it can make financial sense to take advantage of this if you are currently mortgage free or nearing the end of your mortgage term.
How do I qualify for a mortgage as a pensioner?
The maximum age for typical mortgages to be paid off is 70 years old, although specialist mortgage products are available exceeding that age. Prospective lenders will consider your age at the end of term along with your retirement age and your financial situation as a whole.
What are the options for pensioners?
There are typically three mortgages available to pensioners.
- Standard mortgages with maximum ages >70 years old - some lenders offer regular mortgages with a higher age limit which may be more suitable for a pensioner.
- Equity release- these products can be the best of both worlds for older homeowners. By releasing equity from your home, you can make home improvements, buy a holiday home or help relatives out financially. You remain in your home and won't make any repayments until the property sells - typically when you move to a nursing home or pass away. There can be minimum age restrictions on these mortgage products - read our full guide for more information. As a pensioner you are more than likely to qualify.
- Retirement Interest-only (RIO) mortgages - with an RIO mortgage you borrow against your existing home or to buy a new home and make interest-only repayments with the full amount owed to be repaid when the property is sold.
What else should I consider?
You should probably consider taking out life insurance if you are looking to take out a mortgage later in life.
While not compulsory, if you were to pass away, your family would be liable for making mortgage repayments, which might not be possible.
How can I learn more?
Our experienced advisors at Teito have supported many pensioners to take out a mortgage product that is right for their lifestyle and future plans. Whether you plan to carry on working or are starting to consider retirement, complete our online form today.
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Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
Last updated 29 February 2024