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Later life mortgages

More choice in later life with mortgages available for those over 50
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Whether you’ve stopped working or are coming up to retirement age, the chances are you want your later years to be fulfilling ones.

There is a range of over-55 mortgage options to help you finance all the things you want and need to do in life, so your later years can be your best ones.

 

What is a later life mortgage?


If you reach a certain age and want to use some of the money tied up in your home, you may find yourself asking, ‘Can I get a mortgage at 50 or over?’

The age limit and affordability criteria for many traditional mortgages can make things trickier as you get older. Thankfully, there is a range of specialised later life mortgages out there designed to help you increase your options. 

Later life mortgages are typically designed for over 50s and come in a few different types. Among the most popular is a lifetime mortgage, which is a form of equity release, and to qualify you need to be aged 55 or over. The funds released could be used in a variety of ways, from home improvements to holidays, family gifts or paying off an existing mortgage.

The other available mortgages for older people include retirement interest only (RIO) mortgages and conventional later life mortgages. Neither are equity release plans.

The primary appeal of mortgages for over 50s is the ability to release some of the tax-free funds from your home, retain ownership and avoid the stress of moving. With an over-55 lifelong mortgage, there’s no need to make monthly repayments if you don’t want to. 

Mortgages in later life can work in different ways, so it’s best to research your options.

Not sure what mortgage is right for you?

Our mortgage finder can help you understand your mortgage options when it comes to later life. From a lifetime mortgage to a retirement interest only mortgage, with low rates of interest available, now could be a good time to get in touch. 

What are the different types of mortgages for over 50s?

People look to borrow money in later life for many reasons. There are several options if you are looking to do so.

Lifetime mortgage

A lifetime mortgage is the most popular form of equity release. It’s a way for homeowners aged 55 and over to unlock some of the tax-free funds from their home, while retaining ownership.

With a lifetime mortgage, there are typically no monthly repayments to make as the loan, plus roll-up interest, is repaid when the plan comes to an end.

Lifetime mortgage with voluntary repayments

Reduce the size of your lifetime mortgage by making voluntary repayments.

A lifetime mortgage with voluntary repayments is different from a retirement repayment mortgage. It allows you to make voluntary, ad hoc capital and/or interest repayments to help manage the size of the loan.

Retirement interest only mortgage (RIO)

With retirement interest-only mortgages, you pay the interest monthly, without reducing the original amount you have borrowed. The remaining capital is then repaid when the plan comes to an end.

RIO mortgages are for over 50s only.

Retirement repayment mortgage

Most mortgages tend to run for 25 years, but the loan term of retirement repayment mortgages is based on your needs and has a higher age limit.

With a retirement repayment mortgage, you pay back both interest and capital monthly as the mortgage must be repaid in full by the end of the term.

How do mortgages for over 50s work?

 

How do lifetime mortgages work?


A lifetime mortgage is for over 55s and is a loan secured against your home that gives you access to tax-free funds to use in a variety of ways. You’ll still own your property but don’t need to worry about monthly repayments like you would with a retirement repayment mortgage.

With a lifetime mortgage, typically there are no monthly repayments to make as the loan plus roll-up interest is repaid when the plan comes to an end. This happens when you or the last remaining applicant passes away or moves into long-term care.

If you’re looking for a mortgage in later life, lifetime mortgages could provide you with a portion of your property’s value in a one-off lump sum. Alternatively, drawdown lifetime mortgages allow you to release funds in smaller instalments as needed, following an initial lump sum, while only paying interest on the amount released.

 

How do retirement interest only mortgages work?


RIO mortgages are for people aged 50 or over and are secured against your home, allowing you to tap into some of the money built up in your property. Where they differ is that you repay the interest on the loan each month, then repay the original loan amount itself at the end of your plan.

 

How do retirement repayment mortgages work?


A retirement repayment mortgage is a loan secured against your home where you repay both the capital and interest each month. In later life, it can be difficult to get accepted for a traditional 25-year mortgage, but with later life mortgages the loan can be better tailored to your age and needs.

 

What are the benefits of later life mortgages?


Live more comfortably


You may not have saved up quite enough for everything you planned or could simply want to enjoy a more comfortable life. Mortgages in later life could help boost your finances as you approach or reach retirement and offer more freedom to live the rest of your life how you want to.

Depending on the type of over-55 mortgage you take out, it could mean finally taking that trip around the world, putting money towards a loved one’s education fees, or perhaps you just want healthier finances.

With RIOs and retirement repayment mortgages your home may be repossessed if you do not keep up repayments on your mortgage.

 

Stay in your home


Over-50 later life mortgages allow you to retain ownership and stay in your home while still unlocking some of the money tied up in it. You’ll be free from all the hassle that comes with selling, buying and moving house. And it means you can stay close to all the things you’ve grown to know and love.

 

Accessible finance


You might be worried that you’re over the maximum age for mortgage lending or that no conventional options meet your needs. Specialised later life mortgages could help you find the right terms and improve your chances of getting accepted.   

With our lifetime mortgage plans there are no requirements to make monthly repayments and you also won’t need to go through the same affordability checks you would with retirement repayment mortgages.

Retirement interest only mortgages are only available to people who are over the age of 50, while retirement repayment mortgages are open to borrowers of all ages.

 

Lending options


There is an increasing variety of mortgages for over 50s, each with their own features and advantages that are worth looking into.

For example, our lifetime mortgage plans come with a no negative equity guarantee. This means you’ll never owe more than your home’s value and won't pass on equity release-related debt to loved ones. You can also speak to our advisers about building in inheritance protection and downsizing protection, which are available on some plans. 

With a retirement interest only mortgage, you could retain more of your home’s value – and therefore potential inheritance money – by repaying interest as you go. 

 

What age can you get a mortgage up to? 


There is no single maximum age for mortgage lending. Lenders can look at your age when you apply and your age when a plan is scheduled to end, with limits varying between providers. Most do have some form of an age cap.

Mortgage lenders have traditionally been reluctant to lend to older people due in part to the affordability checks they have to carry out. Retirement repayment mortgage checks look at income. Lower income can be seen to make a mortgage higher risk for both parties and reduce options for those in later life as a result.  

With later life mortgages and mortgages for over 50s, however, there aren’t the same restrictions regarding the upper age limit for a mortgage in the UK. As long as the youngest homeowner is 50 or over you could qualify for a RIO, but you'll need to be aged 55 or over to qualify for a lifetime mortgage. Helping those in or approaching retirement increase their options is what we do.

 

Are later life mortgages safe? 


You should always think carefully about borrowing money against your property. There are various benefits and drawbacks involved from one lending option to the next, so it’s sensible to speak to an expert first. It’s important to remember that for lifetime mortgages, seeking advice is a regulatory requirement.

That’s where our fully qualified equity release advisers come in. They’ll get to know your requirements, explain your options clearly and point you in the right direction. Most importantly, if we don’t think one of our Key branded lifetime mortgage plans is right for you, we'll tell you. 

As an independent advisory service, our mortgage advisers can search the whole market, including specialist lenders, giving you more options when it comes to later life mortgages. Whether you're looking for a retirement repayment mortgage or an RIO mortgage, our friendly expert advisers can help you choose the option that's right for you.

You can call us on 0808 252 9170 if you’d like to discuss your options further. Alternatively, you can send us an email and we’ll get back to you as soon as possible.

 

What size later life mortgages could I get?


The amount you could release will depend on lots of factors including:

  • How much you want to borrow

  • Which type of later life mortgage you apply for

  • Your age

  • Your general health and lifestyle

  • The value of your home

As a rough guide, Key Equity Release customers who took out a lifetime mortgage had access to an average facility of £89,028 in 2020.

You can use our lifetime mortgage calculator to get a better idea of how much you may be able to release through equity release.

Use our other free mortgage calculator to see how much you could borrow with an RIO or retirement repayment mortgage. Both are secure, quick and easy to use. 

 

How much does our mortgages in later life service cost?


The cost of our advice on mortgages for older people varies depending on the product.

Our lifetime mortgage advice relates to our range of Key branded products and is completely free of charge. So, you can find out if it's right for you without it costing you a penny.

For RIO and retirement repayment mortgages, these products are available through Key Group and we charge an advice fee of 1.99% on the amount released, subject to a minimum of £1,499, usually payable when the mortgage completes.

Interest rates also vary between products and are subject to eligibility. Speak to our advisers to get a personal illustration.

 

Choosing the right mortgages in later life for you


The right later life mortgage for you will depend on your circumstances, including how much you wish to borrow, if and when you could pay it back, and how you could pay it back.

Retirement is changing with the state pension getting amended all the time. While some will choose to continue working, a retirement repayment mortgage or RIO could be an option for borrowing money against your home.

However, everyone is different and – particularly in later life – will have a changing level of income as well as lifestyle. Both these types of mortgages for over 50s still require you to budget for repayments.

lifetime mortgage is one option for those who want to access some of the tax-free funds from their home without having to service the loan.

With a lifetime mortgage there are typically no monthly repayments to make as the loan plus roll-up interest is repaid when the plan comes to an end. Your home remains yours and the funds can be spent in a variety of ways. Popular choices include home improvements, paying off an outstanding mortgage, clearing existing debt, travel and gifting.

As the mortgages for over 50s market has evolved over the years, so have the plans. With lifetime mortgages there are now more options for tailoring them to your needs, including drawdown, inheritance and downsizing protection.

With so many options for mortgages in later life out there, plus other ways of raising funds, it’s important you make an informed decision. Our expert advisers can make sure you consider your options and talk you through the finer details.

Key Equity Release customer story

John

69, Retired

"The best thing about all of this is I can have the holidays I want, the grandkids are over the moon, their pockets are never empty now. It’s just nice to wake up in the morning and not worry about anything."

Read John's story

Ready to see if a mortgage in later life is right for you? 


Key has helped over 1 million people decide if equity release is right for them. It’s why so many of our customers have given us a five-star Trustpilot rating.

The advice you receive will always be unique to you and in your best interests. Our qualified experts can explain all your options available to you.

There’s never any pressure to go ahead. Contact us today to find out more about eligibility, application and more. You can call us on 0808 252 9170.

If you're not sure which product is right for you, our handy mortgage finder helps you understand your later life mortgage options, with all the information you need to help decide on your next steps. Click here to find out more. 


Things to consider with later in life mortgages


RIO/Retirement Repayment Mortgages

  • A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. You should always think carefully before securing a loan against your property
  • We charge an advice fee of 1.99% of the amount released, subject to a minimum of £1,499, usually payable when the mortgage completes
 

Lifetime mortgages

  • You have to get advice before releasing tax-free funds from your home. Please read our equity release guide and make sure it’s right for you
  • Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits
  • All of our equity advice relates to our range of Key branded products and is completely free of charge. So you can find out if its right for you without it costing you a penny
  • Key Equity Release offer lifetime mortgages only, which is a loan secured against your home. With our plans, you’ll retain full ownership of your home
  • All of our plans meet the Equity Release Council standards. They come with several assurances, including the no negative equity guarantee, which means you’ll never owe more than your home’s value
  • You should always think carefully before securing a loan against your property
Page last updated: Tuesday 24 August 2021