Mortgages for People Over 65 Years Old
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Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
09.10.2023
Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
09.10.2023
People aged 65 used to be classed as old, but as the population lives longer the concept of age, and who is old, has changed. The main criteria is that you have the means to pay the mortgage – this might be through an income through work, or savings, or a pension; this is a similar requirement for anybody who wants to take out a mortgage. But some mortgage providers have a maximum age limit, either in terms of how old you can be when you take it out, or how long you have to repay it. There are some brokers who specialise in mortgages for over 65s.
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Options for people ages over 65 looking for a new mortgage
For people who already have some equity in their home and either want to release cash or remortgage, then an equity release scheme could be the best option. These are called ‘equity release lifetime mortgages’ and they are generally repaid either when you go into care or pass away. These mortgages often have a minimum age to qualify, generally around 55 or 60. These types of ‘mortgages’ are available in three main ways:
Roll up lifetime mortgages
These are where a cash lump sum is released from the equity already in the property. This can be used if your situation has changed and you find that you cannot pay the existing mortgage. Roll up lifetime mortgages are repayable when you sell your home, go into long term care or when you pass away. There is interest payable on this, which is added to the lump sum that you have borrowed, and can effectively cut into the amount of equity that you have not released. The implications of this can be that you will eventually have less equity left in the property, and so will have less to pass onto your family.
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A home reversion plan
This allows you to sell a percentage of your property, and get a lump sum, but you can carry on living in the property rent free. When you sell the property, or pass away, then the lender would receive the agreed value of the percentage that had been sold. This type of arrangement means that you could miss out on any increase in value in the property, because there is no fixed amount that you would need to repay.
A home income plan
This is where you sell a share of your property and exchange the lump sum for an annuity, which means you will get a trickle income for the rest of your life. This is unlikely to be the best option if you need to get a lump sum of money, but can be good if you need a regular, smaller income.
Some of these loans have minimum criteria; for example, a minimum release of £10,000 or £20,000, or a property with a minimum value. These types of mortgages can be very useful for helping to continue home ownership, or release funds, during retirement. But they can also be costly, and that is why it is important to shop around for the best deal. You should also check for any early repayment penalties and to make sure that you would not lose any means-tested benefits. But these schemes can offer a great way of securing extra funds and the future of your home during your golden years. There are very few of these available on the market.
Interest only lifetime mortgage
This allows you to repay the interest, not the debt itself, and there is no maximum term on the mortgage. This means that the amount due for repaid should stay the same, unless you miss a payment on the interest.
This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.
CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT SEEK INDEPENDENT ADVICE.
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Ascot Mortgages authorised and regulated by the Financial Conduct Authority and can be found on the FCA register (www.fca.org.uk) under reference 776062. The FCA do not regulate some forms of mortgages. The guidance and advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £399 per mortgage account. Ascot Mortgages Ltd give you the option to pay a non-refundable fee of £879 payable with the application. If this option is taken, Ascot Mortgages Ltd will refund any procuration fee received by the lender.
Ascot Mortgages Limited is registered in England and Wales and have their registered office at 8 Webster Court, Westbrook, Warrington, WA5 8WD. The company’s registration number is 06764971.
We are a credit broker, not a lender. We work with the whole of the lending market. We may receive commissions that will vary depending on the lender, product, or other permissible factors. The nature any commissions model will be confirmed to you before you proceed.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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