Whether you’re looking to downsize the family home, refinance to release the money in your property, or are simply seeking a lifestyle change, there are a great many individuals in their 60s, 70s and beyond who need property finance and are searching for mortgages for over 60s as a result. Many individuals are also looking to use buy to let or commercial properties as a pension, given that low interest rates make it tricky to use savings to generate good returns.
From a numbers perspective, there’s no reason why individuals in their fifties and sixties shouldn’t be able to borrow. Such applicants are often very well established in their careers and their businesses, and are financially in an excellent position to take out a large loan.
However, upper age caps can be a problem. Many high street lenders use tick-box affordability criteria when making decisions about mortgage borrowing, which can be very frustrating for those who don’t fit into the relevant boxes. Age is a prime example of this; despite the extensive wealth such individuals hold, the options for mortgages for over 60s are much more limited.
Attitudes are shifting slowly as we live longer and longer—but whilst more lenders will accept older borrowers, the issue becomes complicated once again when the mortgage in question is a large loan, as the crossover between the two criteria is small. The best option for such borrowers is to approach a broker who can introduce you to specialist lenders or private banks who will invest in an in-depth conversation with you as an individual client, taking in your entire portfolio and history into account.
Mortgages for over 60s: how to maximise your chances of a successful application
By using a broker like Enness Mortgages, you will already have significantly increased your chances of finding a successful solution. However, there are things you should consider from your end.
- Income source. If you are still working, perhaps because you own your own business, this will be less of an issue. However, if you’re retired, lenders will want to see a regular income stream, be that via pensions or savings, so proving this will be important in your ability to secure a mortgage.
- Credit score. As with any mortgage, looking at your recent accounts and making sure you are able to meet your repayments is important.
- Ability to repay loan in unforeseen circumstances. This is key when arranging mortgages for over 60s. Lenders will always look to see how the loan will be repaid in the event of an unforeseen circumstance.
Older borrowers looking to refinance unencumbered property
Another reason older borrowers want to take out property finance is because they own their property mortgage-free, but have realised that having such a large portion of their wealth tied up in one property is not the most effective route. If you own an unencumbered asset and would like to refinance it to generate funds for a more profitable investment, we have produced a full guide which can be downloaded here to advise you further.