My wife and I want to buy a house, but can we get a mortgage when we are 50?
I am 56 years old and my wife is 54, and finally, after saving. We are ready to buy a house.
However, the mortgage brokers say nothing is available due to our age. Alright?
We have a total income of £85,000. In my position I can consult until I am 70 years old.
We will both have income from our respective private pensions when we retire, but ideally you should pay off the mortgage before we both retire. PR,vYoan email.
SCROLL DOWN TO FIND OUT HOW TO ASK DAVID HIS MORTGAGE QUESTION
Mortgage Help: Our new weekly column Navigate the Mortgage Maze features broker David Hollingworth answering your questions.
David Hollingworth replies: The regulation that followed the credit crunch and subsequent financial crisis sought to improve credit standards in general, but senior lending was certainly one of those key areas that the Mortgage Market Review focused on.
In an ideal world, it makes sense to plan for any mortgage to be paid off when we retire.
Post-retirement income is often lower, so not having to deal with a mortgage will make it easier to budget each month.
However, lenders tended to react by tightening their criteria around lending to older borrowers and, when they didn’t necessarily have specific age limits, many began setting a maximum age at the end of the mortgage term.
That didn’t stop the lender from considering a mortgage that extended past the expected retirement age, but many put a maximum of 70 or 75 years on the end of the mortgage.
While that still allowed older borrowers to make mortgages, it limited options, especially for those nearing the upper end of the age limit.
Over time, mortgage lenders have sought to apply a little more flexibility to the maximum age they can consider, recognizing that some older homeowners want to be able to afford a standard mortgage and were well equipped to manage a monthly payment.
That has helped improve the range of options, and while some lenders will continue to cap the maximum age at the end of the term at 75, others may now consider lending up to 80 or 85.
Others may go even further or have no maximum limit at all, and some have developed products specifically geared toward borrowers age 55 and older.
For example, the Marsden Building Society offers specific products geared toward borrowers age 55 and older and may offer a term that extends beyond the maximum age that would apply to its standard products.
A new type of product was also developed to offer an option that did not require any specific mortgage term.
The Retirement Interest Only Mortgage (RIO) offers borrowers the opportunity to borrow with interest only and the mortgage is only repayable at the time of sale of the property, upon death or upon transition into nursing home long-term.
The maximum age may not be the only limiting factor. Although lenders will have different approaches to age, everyone will need to make sure the mortgage is affordable for the entire term.
Therefore, they will also want to understand that the level of income will be adequate. There may also be more limitations on the proportion of the purchase price they will lend, which could require a larger deposit.
That income may include demonstrable pension income if borrowing is required after retirement. The shorter the term the mortgage is structured in, the higher the monthly payments will be, which could affect affordability.
Therefore, it may be important to prove likely income not only now but throughout the life of the mortgage, so you should gather as much documentation as possible about expected pension income.
After saving up, the couple is ready to buy their own property, but mortgage brokers have said nothing is available for them due to their age.
This also applies to the RIO Mortgage, as a monthly payment will be required to cover the interest.
Since they are aimed at older borrowers, lenders often also consider if you die and how that would affect your income, to make sure the mortgage remains affordable. That may limit its availability for some borrowers.
At first glance, you have a good current level of income, so it would make sense to consider in more detail what limits your options.
It may be your age, but there may well be some solutions available if affordability can be demonstrated for the entire term of the mortgage.
Some of the building societies and specialty lenders often offer solid mortgage options for older borrowers.
Leeds Building Society can consider loans of up to 85 at the end of the term and offer RIO mortgages and smaller societies can also have a flexible approach.
Specialists like Livemore and Hodge also offer a broader range of options for older borrowers than many traditional lenders.
NAVIGATE THE MORTGAGE MAZE
ANSWER YOUR QUESTION ABOUT MORTGAGE
David Hollingworth is the mortgage expert for This is Money and a broker for L&C Mortgages, one of Britain’s leading specialists.
He’s ready to answer your home loan questions, whether you’re buying your first home, trying to re-mortgage amid rate chaos, or looking to plan ahead.
If you have a mortgage question, please email: email@example.com with the subject: Mortgage Help
Please include as much detail as possible in your question so that you can answer in depth.
David will do his best to respond to your message in a future column, but he won’t be able to reply to everyone or correspond privately with readers. Nothing in his responses constitutes regulated financial advice. Posted questions are sometimes edited for brevity or other reasons.