Mortgage Options for Over 60s in 2022

Over 60 but Wanting a Mortgage? Find Out Now if You Qualify

Contributors: Nicola Date, Katherine Read. Reviewed by Francis Hui

Are You Over 60 & Looking to Get a Mortgage? What Options Should You Consider & Is It a Good Idea? We Look at the Most Important Factors for Getting a Mortgage Over 60 & What You Need to Know to Improve Your Chances of Getting the Best Deal.

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Are You Over 60 With a Mortgage or Considering a Mortgage? Read This

Guess what: If you think that there’s no hope for a mortgage in your golden years, you are wrong.

Some windows of opportunity will indeed close, but with that, many exciting opportunities are now available that weren’t before!

In fact, over £4bn was raised in property value by older homeowners in 2021 alone!

Could you be next? We’ll help you discover:

  • The later-life mortgage options available in the UK in May 2022.
  • How much money you could be eligible to unlock.
  • Where to find the best later-life mortgage option for you and your family.

As experts in retirement planning, our team has reviewed over 220 later-life mortgage schemes and condensed the basic details into this easy-to-read introduction.

Here’s what we found!

How Has the Mortgage Market Review (MMR) Impacted Loans for Older Borrowers?

The Mortgage Market Review (MMR)1 has impacted loans for older borrowers as some have more difficulty taking out a loan, especially those older than 60.

After the 2008 credit crunch and subsequent worldwide financial crash, the Mortgage Market Review took place from 2009,

And problematic laws for older homeowners were implemented in 2014.

It caused many banks and societies2 to refuse to lend to existing borrowers if the term would go over 66 years.

The emphasis used to be on affordability, so possible borrowers’ income and expenses were assessed.

This meant that those older than 60 might have fewer expenses, but limited income to successfully get a mortgage.

Are There Mortgages Available for Older Homeowners in the UK?

Yes, there are mortgages available for older homeowners in the UK in 2022.

These are commonly known as later-life mortgages.

The most widely used later-life mortgage is known as equity release.

What Are the Mortgage Options for Homeowners over 60?

The mortgage options available for homeowners over the age of 60 are lifetime mortgage equity release,

Home reversion schemes, retirement interest-only mortgages (RIO’s), and a few standard residential mortgage options.

Here’s more information:

Compare These Mortgage Options for Over 60s

The first step is to compare these mortgage options for over 60s. Affordability, state pension, and retirement laws3 limit options for older borrowers.

Retirement laws usually tend to abolish a compulsory retirement age.

However, there are some fantastic options for you to explore!

Type of MortgageEquity Release Lifetime MortgageEquity Release Home ReversionRIOResidential
DetailsThey are designed to convert accumulated equity into a regular income, drawdowns, or an initial lump sum. A tax-free lump-sum or regular income in exchange for a section of the house or property below market value and repaid with the property sale.For older borrowers, the provider won’t require loan repayments in your lifetime. Only interest payments are expected monthly.A standard mortgage product for purchasing a new house or remortgage of a property.
Affordability ChecksNoNoYesYes
Age55+, Age max may vary from 85 to 10065+55+, no maximumMin and max age set by the provider
Payment TermsIt’s fully repaid from the sale of your home when you die or when you need permanent care. You can opt to pay off the monthly interest and up to 10% of the loan annually. The lender takes their share from the sale of your home when you die or go to long-term care. Monthly interest payments are required, or you risk foreclosure. The loan is paid from the sale of the property when you die or enter long-term care.Can choose to repay the loan plus interest, interest-only, or part & part. If it’s interest-only, a repayment vehicle should be in place—the risk of repossession for default on repayments.
Interest RateFixedN.A.Fixed & VariableFixed & Variable
Product SwitchingMostly not for switchingN.A.Can be switchedCan be switched
ProvidersSpecialist advisersSpecialist advisersGeneral mortgage brokersGeneral mortgage brokers
Is Consumer Advice Necessary?Yes, the FCA’s rules require consumers to get advice.Yes, the FCA’s rules require consumers to get advice.Advised or non-advisedAdvised or non-advised
Monthly Interest PaymentCan pay some, all, or no monthly interest payments.No interest payable. It’s not a loan.Monthly interest payments to be made.Monthly repayments to be made: capital & repayment, interest-only or part & part.
Possible Financial AdviceIt could affect your inheritance. When it comes to an interest roll-up mortgage, the amount owed grows quickly.Usually seen as a last resort.Usually cheaper when compared to most lifetime mortgages out there, but you’ll have to pass the affordability checks.Providers want proof that you’ll be capable of repaying when interest rates increase. They can refuse you.

Discover Which Mortgage Option Is Right for You

You can discover which mortgage option is right for you by speaking to a financial adviser.

Are you looking for a later-life mortgage or RIO mortgage?

Or are you just unsure if later life mortgages are the best way forward?

Ask Yourself These 7 Questions To Find Out!

  1. Am I living in the house I want to retire in?
  2. Am I looking for a like-for-like remortgage, transferring my existing amount?
  3. Am I looking to buy my next home?
  4. Am I borrowing extra money to improve my home?
  5. Am I releasing money to help out your kids or grandkids with a lump sum?
  6. Am I looking to get money for a significant personal gift?
  7. Do I want to free up some cash?

Landing a Loan If You’re Over 60

Here are some pointers on the secrets to landing a loan if you’re over 60:

  • Each provider may have differing age limits, so look for lenders that offer services to your age group.
  • Be aware of rules set out by some providers indicating you have to repay the mortgage by a set, agreed-upon age, or by government retirement age.
  • Some lenders won’t mind loaning you money after you’ve already retired.
  • Where affordability checks are required, providers will review your retirement income if you’re already retired, or close to retirement.

What is Considered to be Retirement Income?

The following is considered to be retirement income: your workplace or private pension, a state pension, investments, property, savings, or income from a job.

5 Factors That Increase Your Chance of Qualifying for a Retirement Mortgage

  • You own your home completely (but you can use the equity released to repay your mortgage).
  • Have enough equity4 in your property, and its value is over £70,000.
  • Keep your home in a good condition.
  • Make sure your credit score5 is exceptional.
  • Simply prove to your provider that you will be able to repay the mortgage.

7 Key Equity Release & Lifetime Mortgage Facts

7 key equity release and lifetime mortgage facts include:

  • Equity release is a type of remortgaging that allows homeowners over 55 to unlock equity in their homes as a tax-free lump sum of cash.
  • Lifetime mortgages are for homeowners aged 55 and older.
  • This mortgage is repaid, usually from the sale of the home, when the last homeowner dies or enters long-term.
  • They have fixed interest rates, and you don’t have to make regular repayments. You can choose to repay the mortgage at the end of the term plus any rolled-up interest.
  • You need to look for lenders who are members of the Equity Release Council and have a ‘no negative equity guarantee’. This will safeguard you against owing more than the value of your house if property prices drop.
  • In addition, there are home reversion plans you could consider, with a minimum age requirement of 65. With these plans, you sell part of your property or the whole property at a lower rate than its market value. You’ll be able to continue living in your property rent-free.
  • Your provider will repay your loan after you die and they’ve sold the house. However, it’s important to remember that by taking out money from your home, the value of your estate can be reduced and your entitlement to means-tested benefits as well.

Please seek professional help and equity release advice before doing anything.

Got Questions? Check These First

What's the Oldest You Can Get a Mortgage?

How Does Over 60s House-Buying Work?

Can You Get a Mortgage When You're Over 60?

Can You Get a 30 Year Mortgage at 60 Years Old?

In Conclusion

Even if you’re older than 60, you’re not exempt from taking out a mortgage.

However, later-life mortgages come with some risks, so it’s always best to discuss your options with a financial adviser specialising in later-life lending.

Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

rachel w

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
John Lawson

Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.
francis

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
kath icon

Katherine Read
Consumer Affairs Writer

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.
nicola

Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

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As Featured In
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