Mortgage Choices For The Over-60s

If you decide to take out a mortgage in your 60s, or older, you will have to make the same choices as a younger borrower.

But the decisions you reach could well be different. Here are the things you will need to think about

The amount

This will depend on a combination of factors, including the value of your property, what you can afford to repay, and what your mortgage lender is willing to lend you.

Unless you have a very high level of disposable income, lenders are more likely to consider you if you ask for a relatively low proportion of your property’s value.

For more on this, go to How much can I borrow?

The Term

If you are only just 60, you might find a handful of lenders willing to offer you a traditional 25-year mortgage term.

If you are 65, you might be able to borrow over 15 to 20 years.

But if you are 70 or above, you may have to accept a term of 10 years or less.

To find out more, read What mortgage term should I choose?

The Type of Mortgage

You can opt for a repayment mortgage (also known as a capital and interest mortgage) or an Interest-only mortgage.

Generally, it’s better to choose repayment, but if you are willing to sell up and downsize to clear your loan at the end of the term, an interest-only deal would have the advantage of lower monthly repayments.

For more on this, visit Should I choose repayment or interest-only?

The Type of Interest Deal

Most people go for a fixed-rate or a discounted variable interest deal although there are other options. (See our A-Z of all UK mortgage types.)

To help you decide, read Should I go for a fix or a discount?

The Length of the Deal

Fixes and discounts can last for anything from a few months to your full mortgage term, but deals lasting two to five years are most popular.

To find out more, see What length of Mortgage deal should I choose?

The Lender

To find a lender willing to consider your circumstances, contact a mortgage broker or an IFA (independent financial adviser).

To help you make the choice, go to Finding your mortgage

 

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