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Writer's pictureThe Cedar Crest Team

Mortgages in retirement and later life.

Home buying that takes you into your 60s, 70s and beyond.


Mortgages in retirement

 

Whether you're looking to downsize or move home after you’ve retired or are approaching retirement, you may be wondering if you can get a mortgage. There are many different reasons why you may want a mortgage that takes you into your 60s, 70s and beyond.

Home-buying trends and the challenges that retirees face when purchasing a home can change, adapting to shifting retirement ages. Whether you’re retired or close to retirement, you may be thinking about buying a home for one of a number of reasons, including remortgaging, moving elsewhere, buying to let, downsizing your home or helping out your children or grandchildren to buy a property of their own.


 

EXTEND BEYOND RETIREMENT AGE

Typically, lenders like banks and building societies are likely to be reluctant to approve loans that extend beyond retirement age, because that’s when your income is likely to drop. This is despite the fact that plenty of borrowers will continue to earn beyond retirement age and be able to support a mortgage, either through working longer or by using income from savings and investments.

If appropriate, one option to consider is a retirement interest-only mortgage. This is a home loan aimed at older borrowers who may struggle to get a mainstream mortgage due to age limits. Each lender has different limits on how much you could borrow against your property.


 

AVAILABLE ON YOUR MAIN RESIDENCE

A retirement interest-only mortgage is only available on your main residence and is very similar to a standard interest- only mortgage, with two key differences. The loan is usually only paid off when you die, move into long-term care or sell the property; and you only have to prove you can afford the monthly interest repayments.

While there’s no minimum age requirement, retirement interest-only mortgages are generally aimed at older borrowers, such as the over- 55s, over-60s and pensioners who might find them easier to qualify for than a typical interest-only mortgage. If you’re borrowing on an interest-only basis, you’re likely to be able to borrow less than if you get a deal where you also pay down the loan.


 

PASSED ON TO YOUR LOVED ONES

Some retirement interest-only mortgages carry terms like a regular mortgage, meaning you either pay them back after a set number of years or when you reach a certain age – 90, for example. Some will also allow you to repay capital as well as interest. This will cut down the size of your loan over time, meaning that more of your property can be passed on to your loved ones.

You’ll need to pass the mortgage affordability checks to prove you can afford the interest-only repayments and your home will be sold off to repay the loan when you die, enter long-term care or sell your home. Your home is at risk if you do not keep up the repayments and the amount you can borrow is based on your retirement income.


 

>> TIME TO DISCUSS YOUR OPTIONS? <<

Whether you’re stepping up, moving on or staying put, when it comes to finding competitive rates we’re here to help.


For more information, contact Cedar Crest Ltd – telephone UK T: +44 (0) 203 883 1017, HK T: +852 6645 4462 – email info@cedar-crest.co.uk.

 


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