How does a retirement mortgage work?

Call us on 01403 270006 or contact us for a free no‑obligation chat

You may have wondered how to get a mortgage if you are an older borrower or thought a mortgage in retirement was not an option available to you. This could be a longer-term alternative to equity release that allows you to use the sale of your home as a means to repaying the debt and it may be the ideal solution for you.

What is a Retirement Mortgage?

Retirement mortgages are a flexible way to borrow in retirement and generally have the option to use the sale of your home as a means of repaying the debt. There are many types available based on your individual circumstances and needs. You may already have an interest-only mortgage and you need to extend the term, or you may want to switch to paying off some of the capital on the loan over a longer period. Perhaps you need to boost your retirement income or help out a family member secure a property of their own? We can help with the best mortgage deals for retirement planning.

How does a retirement mortgage work?

Usually arranged on an interest-only basis a retirement mortgage is essentially a loan secured against a property that commences during retirement. The term could be for the lifetime of the homeowner or fixed (10 or 15 years for example). Repayments of the capital and /or the interest are made until the mortgage is repaid or the property sold.

Can you get a mortgage if you are retired or is there an upper age limit for getting a mortgage?

The later life lending market has many different types of mortgages into retirement specifically tailored to borrowers at or beyond retirement age. Most lenders have their own age limits, but this will always vary per lender. The good news is there are many lenders now offering mortgage products to those with a good deposit, a strong credit history and the means to pay off the loan – regardless of age. Mortgages for pensioners are definitely a viable option.

What is a Retirement Interest-Only mortgage?

This type of plan is a loan secured against a property where your income will be assessed, as borrowers are required to pay the on-going interest payments. The loan however is ultimately repaid through the sale of the property.

What is a Retirement Repayment mortgage?

This type of plan is a loan secured against a property where your income will be assessed to ensure affordability. Borrowers are required to make monthly payments, which reduce the capital balance as well as paying the interest. The scheme is arranged over a fixed term.

Lifetime Mortgage or Retirement Interest-Only. The difference:

On a retirement interest-only mortgage, borrowers must still be able to afford the ongoing interest payments, but ultimately the loan can be repaid through the sale of the property. A lifetime mortgage on the other hand is a form of equity release where borrowers can opt for a plan where the interest is added onto the total loan amount, with no interest payments monthly. When the home is sold the money from the sale is used to pay off the loan.

Our team of expert retirement mortgage advisors have access to the whole market and can discuss, for free and with no obligation, the best options for you.

Call our expert mortgage advisers today

01403 270006 Contact us now


Registered in England & Wales, no 5603163
Private Wealth Mortgages Ltd is authorised and regulated by the Financial Conduct Authority. FCA Number: 445980

Private Wealth Mortgages Ltd, Hillreed House, 54 Queen St, Horsham, West Sussex, RH13 5AD

Responsive website designed & developed by