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Over 50’s Lending

There are more lenders available if you're 50+. You need an expert to help you find the right one.

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For borrowers 50 and over there are now a few different types of mortgage product available for you.

Interest only mortgages

With any mortgage you take out, you have to pay a lender interest at an agreed rate for borrowing the money, as that’s the business they are in! With an interest only mortgage you only pay the interest charge every month. You don’t have to make monthly repayment towards the money borrowed, which means the monthly payments are the cheapest they can be.

However, the lender will only allow the mortgage to continue for a set amount of time known as a mortgage ‘term’. Come the end of the term, your will need to have found another way to have paid the mortgage back. This could be selling the property you are in, another property or selling other assets. Of course this means that this should only be considered if you are comfortable with doing something like this.

Repayment mortgage

Like an interest only mortgage your monthly payments include the interest charged, however the payments also include repayment of the money you have borrowed, known as ‘capital’. The money you have borrowed is divided up over the term of the mortgage in months, meaning if all the payments are made, the money borrowed is paid back by the end of the term. As you are repaying interest and ‘capital’, the monthly payments are higher than an interest only mortgage. Beleive it or not, there are lenders that have no age limitations at all, so someone in their 80’s could take a 35 year term. This isn’t right for everyone of course, advice is key!

Retirement interest only mortgage 'RIO'

This is just like an interest only mortgage except there is no ‘term’. The mortgage can continue indefinitely, as long as the interest is paid every month, until the property is sold or the owner passes away. If the owner passes away, the property falls to the estate, at which point the beneficiaries can decide whether to keep it or sell it.  This type of mortgage is typically a little more expensive than a standard interest only mortgage, quite often its only a small amount extra for a lot of extra benefits. You need to be over 50 to qualify for a ‘RIO’ mortgage.

Lifetime Mortgage (Also known as Equity Release)

This is like interest only, except it isn’t. The lender charges interest, you don’t have to pay it every month. Whilst this sounds great, every month it gets added to the mortgage meaning you pay interest upon interest.

At Advantage FS we don’t provide advice on this type of mortgage. If we identify that this might be a suitable option for you, we will make you aware and recommend a trusted specialist where necessary.

My current mortgage is ending and I need to replace it

Many people with interest only mortgages are finding that their term has run out, before they are able to clear the loan. If you are one of these people, do not panic.

The mortgage market for older borrowers is booming, you just need to know where to look. Whilst on the high-street, most lenders will not grant mortgages beyond the ages of 70 or 75, there are competitive lenders offering terms up to 90, 95 or even without cap.

Now that your current term has ended and you will be setting up a new mortgage, it is worth considering both a repayment or interest only mortgage over the various available mortgage terms. You should consider carefully how long you wish to stay at the property and weigh that up against your available budget to repay the mortgage as you go. There are a few different types of mortgage that could best suit, from repayment, interest only, retirement interest only (RIO) and lifetime mortgages. At Advantage we have experience in this field and a rare ability to consider ALL of these products, to ensure you get the absolute best fit.

My current lender won’t give me a new rate

Mortgages have changed a lot over the years, particularly since 2007. As a result your current lender may have stopped lending for your specific situation, but they still have your mortgage on their books. When this happens, you can find that they may not offer you new rates. Fortunately, where certain lenders have left a niche, others have started specialising in this area. Particularly in recent years, the number of mortgage options for older borrowers has increase dramatically.

It’s Important to seek advice, if you’re in this situation as you may be classed as a ‘mortgage prisoner’.

I want to release some of the equity tied up in my home.

Many people nearing, or in retirement, are finding that they have significant assets, but they are tied up in their home! As a result, arranging a mortgage to raise funds is becoming increasingly common. This could be for any purpose. We often speak to people that want to raise money to gift to their kids to allow them to get on the property ladder. It could be for home improvements, a car or even a holiday!

There are many different ways this can be done from a traditional repayment or interest only mortgage, to a retirement interest only mortgage or lifetime mortgage (Equity Release). You should always seek professional advice, as each one comes with its own set of pros and cons which effect everyone differently.

Can I still buy a property with a mortgage if I’m retired or going to retire soon?

Oh yes! One lender even provides mortgages with just a 5% deposit and no age limit. So, whether you’re planning for retirement or are already retired, there are plenty of ways to secure a mortgage and buy a home.

Can I get a mortgage on a property with an occupier age restriction? (retirement property)

You’ve likely seen those appealing online adverts for well-priced properties. This often leads to the question: what exactly is a ‘Retirement Property,’ and can you get a mortgage on one?

While there are several factors to consider, the short answer is yes. Some retirement properties are standard homes with a simple age restriction on the title, while others are part of a more comprehensive retirement community with specific amenities.

For lenders, the property itself is a primary focus. This is precisely why it’s crucial to use a specialist mortgage brokerage, like Advantagge FS, when considering this type of purchase.

Another consideration is the deposit. Lenders will require a larger depsoit for this type of property, typically 40% of the purchase price.

“So many people over 50 think their options are reduced by their age. when the opposite is true! Whether you’re 51 and planning to work indefinitely or 90 and retired. We’re here to help”

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