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In recent years, after the mortgage industry underwent an overhaul in 2015, borrowers over the age of 50 found it increasingly difficult to get their mortgage application approved. The reason for that was an industry overhaul that took place in 2015 through a process called the Mortgage Market Review. The Mortgage Market Review’s principal purpose was to introduce safeguards to ensure lenders acted responsibly and to remove some of the risky lending practices associated with the banking crisis in 2007. In the process they made life increasingly difficult for older borrowers.

Thankfully, there are signs that the industry is becoming more accommodating to older borrowers once again. This might have something to do with our ageing population - it’s been estimated that over a quarter of the population will be 65 or older by 2034. Meanwhile, Age UK, has recently highlighted that the number of people aged 100 years and over in the UK has risen by 72% over the past decade.

Why mortgages for pensioners?

There are many reasons why older people would wish to get a mortgage; a high divorce rate among people in their 50s means that many of them will be in the market for a new home. Some may wish to remortgage. And then there are those who are currently in their thirties and forties but find that the only way of getting onto the property ladder is to take a mortgage longer than the customary 25 years; a mortgage that they may find themselves repaying well into their seventies or eighties.

How many years can you get a mortgage over?

While in the past the mortgages tended to be for 25 years, now affordability dictates that clients might go for up to a 35 year-mortgage. That doesn’t necessarily mean, though, that you will be stuck working into your eighties. Mortgage advisers like Jas Bola from Hillcrest Property Solutions, one of Family Mosaic’s panel advisers, explains:

“I could sit down with a client and demonstrate to them that a 30-year mortgage is affordable and their monthly payments may be £400. Likewise, I can sit down with them and say ‘actually, you could go for the same mortgage but you will pay £350 if you go for a 35-year term’. What we could do then is to go for a two-year fixed rate because initially the client will have additional expenses like buying furniture, white goods, etc, and then remortgage after two years and shave years off. This is how longer mortgages allow extra flexibility to new buyers.”

What is the maximum age for mortgages?

In general, 70-years of age seem to be the new industry standard for the top age for mortgages. There are exceptions, though. In May 2016, two lenders offered mortgages above that age: Nationwide increased it’s lending age to 85 and Halifax did the same up to the age of 80.

The thing you need to remember, though, is that if you want to take out a regular mortgage up to the age of 70, you need to be willing, in principle at least, to commit to working until that same age - the lender needs to know that you will have a regular income to continue paying your mortgage. Obviously, if you manage to pay off your mortgage early, you can bring down the retirement age to the age that you want. Mortgages are not written in stone and many things can happen throughout an individual’s lifetime: they might staircase to 100%, they might sell their share, or, if they start overpaying, their retirement age of 70 can be dropped to the standard age of 65.

Things to consider when taking out a mortgage in retirement

How good is your credit score?

Just as everybody else, when you apply for a mortgage, the lender will look at your credit rating so it pays to make sure that you look credit-worthy. Top 5 tips to increase your credit score include:

1. Get an Experian account to keep an eye on your score (other providers include: Clear Score and Noddle).
2. Make sure you make all payments on time.
3. Have a credit card which you pay off regularly (borrowers like to see a history of loan repayments).
4. Reduce the amount of debt you owe.
5. Get listed on the Electoral Register.

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