Can I get a mortgage in retirement?
You can get a range of mortgages in retirement. Learn more about getting a mortgage when you’re retired and the different types of mortgages designed for older borrowers.
The headlines
- You can still get a mortgage if you’re looking to retire or you’ve already retired.
- There might be some extra factors to consider, such as proof of retirement income and your mortgage term.
- For example, your mortgage term must end by the time you turn 80 to be able to get a mortgage with Lloyds
Most lenders have rules about the maximum age you can be at the end of your mortgage. Your age when you take out the mortgage could impact your term and repayment amount.
- Mortgages for over 50s. Most lenders offer standard term mortgages for people over 50. But you might be asked to show your estimated pension income.
- Mortgages for over 60s. Lots of lenders offer mortgages for people in this age bracket. But your options might be more limited. For example, you might need to repay over a shorter term.
- Mortgages for over 70s. Your options tend to be more limited. Lenders are likely to offer shorter terms.
To apply for a mortgage with Lloyds, you must be no older than 80 years old at the end of your mortgage term.
How to get a mortgage in retirement?
Whether you’re buying a home at 25 or 65, your lender will want to know that you can repay your mortgage. So, 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. Here’s how:
Repayment mortgage
Whether you’re retired or about to retire, you could still get a standard repayment mortgage. Choose between a fixed rate mortgage or a tracker mortgage based on your needs.
Retirement interest-only mortgage
A retirement interest-only mortgage, or an RIO mortgage, is a type of interest only mortgage aimed at ‘later life’ customers over the age of 55. You only pay the interest each month, and the original amount you borrowed isn’t repaid until later, usually typically when you die, move into long-term care, or sell the home.
Lifetime mortgage
A lifetime mortgage is for older people aged 55 and over. It’s a type of equity release loan that’s secured against your home. You don’t have to make monthly repayments. Instead, your loan is paid off when the house is sold after your death, or when you enter long-term care. Lloyds do not offer lifetime mortgages.
Ready to apply?
Even if you’re retired, you’ll need an Agreement in Principle (AIP) to confirm how much you might be able to borrow. It’s quick and easy to apply for an Agreement in Principle online. It should take about 10 minutes and doesn’t impact your credit score.
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.
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 an RIO mortgage, your repayments only cover the interest. The money from selling the house then goes towards paying off the mortgage.
With certain retirement interest-only deals, you might also be able to pay off some of the actual mortgage as well as the interest.
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It might be harder to get a mortgage as an older borrower, as lenders are likely to see you as more of a risk. But that doesn’t mean a mortgage is off limits. You might just need to give extra proof about your retirement income and choose a shorter term that fits within your lender’s age limits.
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There are several things you could do to increase your chance of getting a mortgage when you retire. This includes:
- saving a larger deposit if you’re looking to buy
- checking your credit rating – and exploring ways to improve your credit score if needed
- working out how much you could afford based on your regular income or earnings.
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