Typically, a mortgage is a long-term commitment. The younger you are, the wider your options when it comes to repaying a mortgage over many years to come. As you move into your 50s, however, applying for a mortgage or a remortgage may involve different considerations – not least the number of years over which you are likely to be able to make the repayments.
Yet there is ample scope for increasing your chances for securing a mortgage with a maturity date that might extend well into your retirement, so here are a few of the considerations you might want to keep in mind:
- probably the most important thing on your side is your very age. With maturity is likely to have come a proven track record in managing your financial affairs efficiently and responsible
- as with a mortgage application made at any age, your credit rating is likely to be a major factor determining whether a lender is prepared to advance the loan you are seeking
- your ability to repay a mortgage of course depends on the income you have available
- if you are over 50 when making the application for the loan, at some stage you are likely to be relying upon pension income from which to make the mortgage repayments
- if retirement is still some way off, suggests the Home Owners’ Alliance, it may be enough to demonstrate that you are currently paying into a pension scheme, if retirement is just a few years away, any potential lender may require a more detailed budget
What you can afford
- the mortgage market is keenly competitive, even for the over 50s – so aim to take advantage of the best mortgage deals that may be available
- to do this, a careful mortgage comparison is necessary for identifying the best deals on offer
- whilst looking for these mortgage best buys, you might also want to consider alternatives such as equity release – a lifetime mortgage, for example – about which you might want to seek further information
- in addition to the rate of interest charged by the lender, the affordability of any mortgage is going to be determined by the amount you want to borrow and the period over which it is going to be repaid
- in the past, most of the leading mortgage lenders tended to be especially cautious about approvals for borrowers who might be repaying a mortgage well into their retirement years and imposed an age cap on the maturity date for any mortgage
- it was left to the smaller and more specialist mortgage lenders to consider applications from such borrowers on a case by case basis
- but the picture is changing and a study conducted by the Building SocietiesAssociation (BSA) found that in recent years, 35% of total lending went to borrowers who would be completing their mortgage repayments after the age of 65
- major lenders, too, are gradually raising the age cap on mortgage applications, with both Halifax and Nationwide increasing the maximum age on maturity of a mortgage to 80 years. Even when it comes to applying for a mortgage, therefore, these days age is but a number – and 50 is no age at all.
Even when it comes to applying for a mortgage, therefore, these days age is but a number – and 50 is no age at all.