In the past, lenders were reluctant to provide mortgage loans for older homebuyers, but this is changing. If you are in your late 50, 60s or even 70s, you may still be eligible for a mortgage loan.
One borrower last year was an 88-year-old man. He arranged a mortgage for £3m over five years at a fixed rate of 3.5 pc. He had substantial assets and income, as well as homes in Switzerland and London. The lender saw the loan as low risk as it knew that the Swiss property could be sold to repay the debt if necessary.
People are living and working longer, so lenders are no longer so reluctant to provide loans for older people. Like all borrowers, older people need to prove that they have sufficient income to afford the mortgage payments. Many people of pension age not earning money from a job have high incomes from private pensions and insurance policies.
Usually, the mortgage lender wants the mortgage to be paid back when the borrower is between the ages of 70 and 85. This may mean a high initial deposit or higher monthly mortgage payments.
It is also recommended that mortgage protection insurance is taken out. This will cost more for older people than it does for the younger mortgage applicant, but will not necessarily be prohibitive.
As lenders become more flexible about lending money to older people, it is becoming an increasingly good time for the elderly to take out a mortgage.