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Mortgages for over 60’s: What you need to know

New laws, rules and regulations were introduced to mortgages in order to avoid a repeat of the circumstances that led up to the last economic meltdown, and this has had a dramatic effect on who can get one.


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New laws, rules and regulations were introduced to mortgages in order to avoid a repeat of the circumstances that led up to the last economic meltdown, and this has had a dramatic effect on who can get one.

These new regulations from the MMR (Mortgage Market Review) basically ensure that lenders will hesitate to give mortgages to anyone with a slight risk attached. This means that the generation who are approaching retirement, or who are over 60 years old, face quite an uphill battle to get a mortgage. The worry is that they won’t be able to pay off their mortgage in their lifetime and that their pension will not be able to cover the costs.

However, there are a handful of companies that will give mortgages to over 60’s, and these 10 are the top mortgages for pensioners to choose from, according to

So, what do you need to consider if you are nearing or past the age of retirement and are looking into taking out a mortgage?

While most of the considerations are pretty similar to those of any age, there are extra things you need to think about when taking out a mortgage if you are over 60 years old:


How much should you borrow?


The first thing that you need to decide on is the amount you are looking to get for your mortgage. Now, no matter how old you are, this is always determined by a whole lot of factors such as your disposable income, the value of your property, your age and how much the mortgage lender is willing to put up.

Make sure you work out exactly how much money you can safely borrow and pay back. If you have a really high disposable income you should be more than okay to get the amount you want, however, if you don’t – you are more likely to be considered if you only ask for a small percentage of your property’s worth.


The term you are likely to get


Another essential factor to consider in mortgages for over 60’s is the time frame in which you will be allowed to pay back your mortgage. As you get older – it becomes harder to get long-term mortgages, as lenders feel that you may not be able to pay it back.

If you are just turning 60, or just over the mark, then some companies will be willing to give you a 25 year mortgage term, this will decrease to 15 - 20 year mortgage terms as you become 65. However, at the age of 75 and older, you will have to accept terms for a mortgage that may be 10 years or less. Find out more about mortgage terms in this article from Mortgage Sorter.


What type of mortgage should you choose?


The two main kinds of mortgages are a repayment mortgage (also called a capital and interest mortgage) and an interest-only mortgage.

A repayment mortgage is the most popular type of mortgage for most people and when it comes to mortgages for over 60’s – it’s probably the wisest choice. The monthly payment on this kind of mortgage covers a percentage of the original amount borrowed, as well as the interest due. This means that while the per month payments may be a bit higher, when you have finished paying off your mortgage, your debt is cleared and the property is yours.

An interest-only mortgage allows a smaller monthly sum to be paid, which only covers the interest rate. While it’s nice to have a smaller payment due every month – it does mean that you will still owe the full amount you borrowed at the end of your term. If you are unable to pay this back, your property could get repossessed.


You need to find the right broker


Yes, it can be tricky to get mortgages for over 60’s, however, it’s certainly not impossible and a lot can depend on finding the right broker for you.

Make sure that you do your research and only contact experienced mortgage brokers that are properly licensed. You could also go through an Independent Financial Advisor (IFA), who can do the research for you. They know the ins and outs of mortgages and will be able to find the best deal out there to suit your circumstances.

Mortgages for over 60’s are certainly out there, and if you are looking to buy a house for your retirement, why not buy somewhere abroad? Spain is the perfect destination for British retirees, as it is close to home and has warm weather, wonderful beaches, a rich culture and reasonable property prices. Have a look at our villas in Calpe and other Spanish properties that we have in our extensive property portfolio.



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