Getting a Mortgage When you are Older than 55

Many people aged in their late 50s and 60s who have a secure income and good employment prospects assume that they will be able to take out a mortgage, or can re-mortgage, without too much difficulty. If so, they could be in for a nasty shock.

The banks and building societies are turning their backs on their older customers even if the past payment record on their current mortgage has been impeccable and even if they have a sizeable house deposit. One reason for this apparent poor treatment of their ageing clients is the withdrawal of interest only mortgages by most of the mainstream Providers. Furthermore, the Providers are reluctant to offer a mortgage which extends beyond the projected retirement date of an applicant irrespective of their potential retirement income. Nearly all Providers insist that a mortgage be repaid when the eldest homeowner reaches the age range of 70 to 75.

The “ageist” approach adopted by the Lenders is of course at conflict with the trend for retirees to continue working past their scheduled retirement date, either on a part or full time basis, at a time of consistently increasing life expectancy. Furthermore, as a consequence of the Lender’s policy towards the elderly, many homeowners at or in retirement can find that they are either trapped in expensive mortgages or unable to move to a home more suitable for their retirement.

It should come as a source of great relief to those people in this position when they learn that the Equity Release sector now includes several plans which are particularly appropriate for them. For example, a range of interest only mortgages is now available which do not have to be repaid during the lifetime of the respective homeowners. Most of these plans have the safeguards associated with the Equity Release Council including a fixed interest rate for life. Also, one Provider has an exclusive Lifetime Mortgage at an interest rate which is fixed for the first five years enabling up to 50% of the property value to be borrowed subject to affordability.

If you would like to learn more about the mortgage options for those aged 55 and over, it is important to talk to an independent Equity Release adviser from a company like Bower which has access to the full range of products which are on offer.