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Can I get a mortgage when retired?
A quick summary
There are a range of lending options when you’re retired.
So, whether you’re looking to downsize or move to a different area, we’ll explain all you need to know about retirement mortgages.
Qualifying for a mortgage when you're retired
When you apply for a mortgage as a retiree, there are a few extra things to look out for.
Repayment period
Having less time to pay your mortgage back, will make your monthly repayments more expensive. Some lenders set an age limit for new mortgage applications at 65 to 75 years old.
With Lloyds, there is an age limit of 80 years old at the end of your mortgage term.
Employment
If you’re already retired, or you’ll retire during your mortgage term, you’ll need to prove that you can continue to make the monthly repayments.
Retirement income and mortgages
Whether you’re buying a new house at 25 or 65, your lender will want to know that you can repay the mortgage in full.
Some lenders will let you take out a mortgage that you’ll still be repaying after you’ve retired. You might also be able to arrange a new mortgage – even after retirement. This often depends on your retirement income.
Working out your retirement income
To calculate your retirement income, work out:
- your expected income from pensions
- any weekly or monthly State Pension payment
- any other income from property or investments.
Make your lender aware of all these income types when you want to apply.
Proving your income to your lender
When considering your application, your mortgage provider will need to see evidence of your retirement income.
For workplace pensions, you’ll need to give a pension forecast or annuity statement and a statement for your State Pension.
If you’re still working, but planning on retiring soon, you may need to show evidence of both your current income and what you’ll have when you’ve retired.
Ready to apply?
It’s quick and easy to apply for an AIP online. It should take about 10 minutes.
You'll get an instant decision if you apply between 6am and 10pm Monday to Saturday, or 6am and 9pm Sunday. Otherwise, we'll give you a decision the next day.
Retirement interest-only mortgages
With this mortgage, you only pay the monthly interest for a fixed period without paying anything off the total amount owed.
Who can apply for a RIO
Retirement interest-only mortgages work in a similar way for people over the age of 55 and those who are retired or planning to retire soon.
You’ll need to pass affordability checks and show the lender you’ll be able to make the monthly interest payments to apply for an RIO mortgage.
Repaying a retirement interest-only mortgage
With a retirement interest-only mortgage, your repayments only cover the interest.
The money from selling the house often goes towards paying off the mortgage.
With certain RIO deals, you may also be able to pay off a percentage of the actual mortgage as well as the interest.
Check with your lender to understand your options or use a mortgage calculator to work out what you can afford.
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