getting a mortgage over 50

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The last couple of years has seen quite a lot in the press with regards to “older” borrowers and the struggles of getting a mortgage over 50. The reality is that is not quite true… Never let the truth get in the way of a good story as the saying goes.

So the papers are wrong?

Possibly. Getting a mortgage over 50 is not as straight forward as it is for someone who has more working age years left to secure a mortgage obviously but Age (within reason) will never be the reason for a declined Mortgage application. The issue is actually more from an affordability perspective than the age itself. The average Mortgage historically would have originally been over 25 years. Over the last 5 years or so that has been increased to 30 or even 35 years. 

If you are 50 and plan to retire at 67, then your affordability is being assessed over 17 years rather than the normal 25 years. As the repayments will be higher due to the shorter term then it means your income may not be enough to support the same size Mortgage as someone who can take out a 25 year Mortgage.

Not all doom and gloom then?

Absolutely not! To give an example, I have put some figures on one lenders affordability calculator. An applicant earning £30,000 with a 15% deposit over 25 years and no kids or debts can theoretically get a Mortgage for £133,500.

The same scenario but lets assume we have someone who is 55 and can get a 12 year Mortgage, the maximum loan would be £122,500.

So despite the Mortgage being over half the term, the maximum loan is only £11,000 less.  That might be enough to mean you can not afford to buy, but it is just an example and all lenders have different affordability rules and criteria.

So then, getting a mortgage over 50 is not as, out of the realms of possibility as the media portrays. Affordability with a shorter term is the main problem but doable with the right broker.

So it is always worth having a chat as you never know what is out there.