How to get an interest-only mortgage in retirement up to age 85
Many standard mortgages only allow you to borrow up to the age of around 65-75. However, a number of lenders offer specialist products aimed at older borrowers looking to keep a mortgage well into retirement. Several of these will allow you to borrow on an interest-only basis up to age 85.
Whether you can get this kind of mortgage will depend on a number of factors, so it’s a good idea to familiarise yourself with the requirements of interest-only retirement mortgages for those up to the age of 85 before starting an application.
Do you qualify for an interest-only retirement mortgage?
The exact lending criteria for mortgages varies between providers, but there are several things which will make it more likely that you will be accepted for an interest-only mortgage up to the age of 85.
- Income from pensions and any other eligible sources high enough to cover the monthly payments
- A strong credit history
- Being up-to-date with all of your payments on your current mortgage
If you have not yet retired, you will need to provide details of your pending retirement to lenders.
They will generally need to know:
- The date you intend to retire
- The current value of your pension pot
- Your expected monthly income in retirement
- Proof of any additional income e.g. from shares or rental properties
How much can you borrow with an interest-only retirement mortgage?
Most lenders will allow you to borrow up to around 50-60% of your home’s value as an older borrower, compared to as much as 95% for younger borrowers. You must therefore factor this in when looking at how much you need to borrow and considering whether it may be worth downsizing.
It is also worth bearing in mind that mortgage terms tend to be shorter for these types of mortgages, with 5-15 years being typical.
Applying for an interest-only mortgage up to age 85
Many interest-only retirement mortgages are only available from specialist lenders, although a number of high street lenders do also provide mortgages for those up to age 85. It is therefore a good idea to use a broker when applying for this kind of mortgage.
A mortgage broker will have access to the specialist lenders who do not deal direct with the public and will also be able to compare these against mortgages offered by high street lenders. That way you know you are seeing mortgage deals from across the whole market, giving you the widest possible choice.
A mortgage broker will also be able to speed up the application process and help you avoid any pitfalls which could hold up or entirely derail your application.
Interest-only equity release mortgages
Many older borrowers are interested in unlocking the equity in their homes to give themselves a more comfortable retirement.
An equity release mortgage can allow you to raise capital to pay off an existing mortgage, pay for home improvements, fund unexpected costs or provide additional money to support your retirement.
An interest-only equity release mortgage is usually only repaid when your home is sold, normally when you move into a care home or pass away. The rates on equity release mortgages can be relatively high, however, so it is strongly advised that you seek guidance from a regulated financial adviser before taking out this kind of mortgage.
Find the best deals on interest-only mortgages in retirement up to age 85
Choosing the right retirement mortgage for you can be challenging, which is why we offer a friendly, expert mortgage broker service to help make the process much easier. With access to all the leading specialist and high street lenders, we can find you the very best deal on your retirement mortgage.
To find out more about getting an interest-only mortgage up to age 85, call Fair Mortgages today on 0117 313 7780 or use our simple contact form to get in touch.