Mortgages For Over 60s - The 6 Best Options Compared

Once you reach a certain age, with retirement either already upon you or looming, your mortgage options change. With many traditional lenders unwilling to offer long-term loans for people who might not have the income to meet regular repayments, the mortgage landscape transforms, focusing on releasing built-up equity in your home over traditional loans designed to buy a new home.

However, with a clear understanding of your needs and our specialist knowledge in the UK mortgage marketplace, Clifton Private Finance can offer tailored solutions.

5 Key Takeaways:

• Later-life mortgages focus on equity release and shorter-term loans, as traditional long-term lending becomes less accessible after 60.
• Common goals for borrowers include downsizing, releasing equity, investing in property, or funding lifestyle needs like home improvements or helping family.
• Two main mortgage types are repayment mortgages (generally with shorter terms and higher deposits than standard), and exit-based mortgages (e.g., interest-only, lifetime, RIO, bridging loans).
• Product choice depends on your goals - equity release favours lifetime/RIO mortgages; investment and fast purchases suit bridging finance.
• Clifton Private Finance offers tailored advice and better lender access, improving your chances of approval and getting the right solution for your needs.

In this guide, we'll cover six of the most popular options for the over-60s in more detail.

And for an immediate eligibility check on your options for equity release products, complete our calculator below: 

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Reasons for an Over-60s Mortgage

It may seem like an over-simplified question, but understanding why you want a mortgage is key to getting the right product.

While younger borrowers are typically all looking for the same thing - funding to buy a home - over 60 customers often have more complex requirements, from equity release to downsizing.

It’s essential to determine your why.

This may include:

• Buying a first home - It’s very rare for someone to look for their first mortgage after 60, but it does happen. Perhaps you have been renting for a long time, or previously living with a partner who already owned a house.
• Upsizing - Moving from a smaller property to a larger one means you already have a foot on the property ladder. Again, it is rare to see older borrowers looking to upsize their houses, but there are products available for this purpose.
• Downsizing - A much more common requirement for retired people or those approaching retirement is the desire to move to a smaller home, selling the family house to find something a little more convenient, perhaps close to family who have moved away.
• Equity release - Equity release is the process of making use of the investment you have put into your home to provide capital for other uses, such as helping a family member get on the property ladder, paying off other debts, or just having a fantastic holiday.
• Home improvements - Unlocking the capital needed to undertake renovations and conversion projects is common, especially if accessibility needs need considering.
• Purchasing a holiday home - Mortgages to get yourself a small place to have as a family holiday home are common, both for UK properties and abroad.
• Investing in a property to let - Becoming a landlord and buying a second property to rent out can provide additional security for you and your family throughout your retirement.
• Buying for renovation and profit - Investing in a rundown property with as a venture to do it up and sell it on, known as ‘flipping’ the property, is a solid reason for a later life mortgage.

Armed with your reason why, it’s easy to consider the different mortgage products available and choose the one that best suits you. 

Understanding the over-60s Mortgage Landscape

At their core, mortgage lenders are interested in one thing only - can you repay the mortgage?

That’s it. All the underwriting, all the risk assessment, all the affordability checks and questions regarding your financial situation all come down to that one thing - can you repay the mortgage?

If the answer is ‘yes’ and you can present the evidence to support it, the chances are there’s a lender out there who will give you the mortgage product you need.

If the answer is ‘no’ or you are unable to back up your reasoning, then it’s sensible that lenders will reject your application.

By working with us, you can explain your side of the argument and let us work on framing it in a lender-friendly way. This pre-approval process means we can give you an idea whether a mortgage is viable before you officially approach a lender, avoiding wasted time on rejected applications, and ensuring that you get the best deals and rates that are tailored to you.

Choosing Clifton Private Finance increases your chance of a successful mortgage application and gets you the funding you need. 

The Different Types of Over-60s Mortgage

There are two different types of mortgage structures available to the over-60s market:

Long-Term Repayment Structures

The mortgage structure that most are familiar with is the long-term repayment mortgage. These mortgages are loans that provide the capital you need to buy a property and are paid back over time (with interest) until the balance is cleared. They can be structured on terms from 5 years to 30 years.

Long-term repayment mortgages for the over-60s are also often secured through a larger deposit, significantly lowering the risk for the lender. This may be through cash savings, the sale of a current property, or by being secured on the equity of an existing home.

A traditional residential repayment mortgage is the most common type of long-term repayment loan, with second-charge loans (also known as homeowner loans) also very popular.

Exit-Based Structures

An exit-based mortgage is one where the principal of the mortgage (the amount you initially borrow) is not repaid until the end of the term. It just sits there as a debt gathering interest until an agreed upon time. When the term ends, the total becomes due and the mortgage must be paid. This can be done either by selling the property, using funds from elsewhere, or refinancing (remortgaging) the property.

Exit-based loans can be very flexible. Some include a monthly repayment to cover the interest, making sure that the balance of the mortgage doesn’t grow; while others have no monthly repayment and are simply cleared in full at the end of the term. Because property tends to increase in value over time, exit-based mortgages can be strong investments, with profit made when the time comes to sell up and repay the loan balance.

Exit-based mortgages and lending options include:

Interest-only mortgages - These have a monthly payment of the interest, with the principal due at the end of the term. Interest-only mortgages are often used for purchasing property to let (known as BTL or buy-to-let mortgages, with a low monthly repayment that’s covered by the rental income and long-term profit made on the investment.

Lifetime mortgages - The primary form of equity release, a lifetime mortgage is one that has no monthly repayment, with the full balance of the loan (including all interest) due to be paid by the estate upon death.

Lifetime mortgages are a powerful way to utilise your existing home to provide capital for use in your retirement, and are often used to help family members, improve your retirement options, or consolidate other debt. They can also be used for inheritance tax planning.

Retirement interest-only mortgages (RIO) - RIO mortgages are specially designed for the over-55s to combine the advantages of both a traditional interest-only mortgage and a lifetime mortgage.

A RIO mortgage begins its life as an interest-only structure, converting to a lifetime mortgage once your income decreases and the interest payments become a burden. RIO mortgages are often used for downsizing and to purchase second homes for holiday or retirement purposes.

Bridging finance - Often overlooked by mortgage advisors, bridging loans are a powerful tool for use by over-60 homeowners when looking to move to a different home or invest in the property market.

Extremely fast to obtain, bridging finance gives you the quick funding needed to seize opportunities, such as when buying a house at auction, or if looking to invest in a property flipping project.

Bridging finance is a short-term exit-based structure that’s ideal for homeowners with equity in existing property who are looking to make the most of their investments.

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Choosing the Best Mortgage Type for You

With a clear vision and open-minded understanding, picking the perfect mortgage product is easy.

Speak to one of the team at Clifton Private Finance to discuss your plans and we’ll help you get the right mortgage with a smooth application and confident pre-approval.

Over-60s Mortgages with Clifton Private Finance

Working with a specialist mortgage broker is vital when you’re an older borrower. Traditional banks are quick to reject older applicants out of hand as they don’t have the systems in place to make specialised decisions effectively.

Our teams work with a holistic approach, considering your full plan and discussing options behind the scenes to widen your potential and make sure you deal with an experienced specialist: our residential mortgage specialists will pass you to our equity release team if that makes the most sense, while our bridging experts will step in if a short-term solution will unlock additional funding and support that long-term mortgages can’t manage.

Call Clifton Private Finance today to speak to a dedicated advisor who will listen to your requirements, answer your questions, and help turn your retirement goals into reality.

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