Head of Lending, Marsden Building Society
It might surprise you but applying for a mortgage in later life isn’t out of bounds. In fact, those in later life can apply for a mortgage to buy a new home, remortgage an existing property or release funds to help children or grandchildren onto the property ladder.
Steve Robinson, Head of Lending at the Marsden Building Society, says that a growing number of lenders offer mortgages for the over 50s.
“This reflects how people’s lifestyles have changed,” he says. “And, of course, we’re all living a lot longer.”
The plus for most older borrowers is that they’re likely to have a more-or-less guaranteed pension income.
And it’s not just to transfer a current mortgage, older borrowers can take on a new mortgage and can borrow for a variety of personal reasons, supporting their lifestyle or loved ones.
Robinson admits, however, that the definition of a ‘retirement mortgage’ can mean different things to different lenders.
“From our perspective, applicants need to be aged 55 or over, either in retirement or very close to it, ” he says.
“Everyone’s circumstances are different, so it’s important to get the right advice and make sure the mortgage is tailored to your individual needs to make sure it’s affordable, both now and in the future.”
How much you can borrow will depend on your circumstances but, in the case of the Marsden, they’ll consider applicants from the age of 55 to the age of 85, opening up options for borrowers in later life.
What potential borrowers can expect on application
When applying for a retirement mortgage, older borrowers can expect lenders to carry out a full affordability assessment.
“It’s important to work out what the applicant’s income is, what their commitments are and if they can afford to make mortgage payments comfortably,” says Robinson.
“As with any mortgage, the property is valued, and a credit search is performed to make sure they are up-to-date with their commitments.”
But aren’t retirement mortgages a risk for both lender and borrower? After all, the clue is in the name: the mortgagor isn’t working anymore, so not generating an income.
“The plus for most older borrowers is that they’re likely to have a more-or-less guaranteed pension income,” says Robinson. “They may also have investments and, if they own a buy-to-let-property, rental income that we can take into consideration.
“There’s a lot more certainty about the income generated by people in later life. And, because they’re a little bit older, they’ve usually had a mortgage before, so understand how it works and what the commitment is.”
A change in circumstance is a key risk in later life, so finding a lender experienced in retirement mortgages is important. It’s not just about the help you receive in arranging your mortgage, but the ongoing support the lender will provide throughout the life of the mortgage. Circumstances can and will change, so you want to feel confident that help with always be there.