mortgages for over 50s

anoneemouse

Things have changed a lot since I first bought a house.

I am now in my 50s and planning on moving to a house that will suit me for the rest of my life.

I do not have a mortgage currently, but will need to get a small one in order to be able to buy a better place and cover the costs of moving to it.

I am only looking to borrow about £40,000 and this is a very reasonable "multiple" of my salary. When I was younger there would have been no problem at all in getting a mortgage for this small a "salary multiple" and with as much "deposit" as I will be able to put down (ie the money tied-up in my existing house).

I just want to take out a mortgage on exactly the same basis as I did the first time. This means a standard repayment mortgage over the standard 25 year period, with no set-up fees and no mucking-around with things like "tracker mortgages", etc (ie any of the stuff that has come up as ways to manage to get a mortgage for the housebuyer, excuses to make charges by the mortgage lender, etc).

Just plain straightforward, exactly the same sort of deal as I had before.

I've checked out the Nationwide "find me a mortgage" scenario and found that the site tells me I cant have a 25 year mortgage term because of my age (ie mortgages must finish by 75). I dont anticipate that a new mortgage would actually take me as long as 25 years to repay. I anticipate doing so sooner than that. However, I need it to be the standard 25 year mortgage term (hopefully with the standard possibility of extending the mortgage term to 30 years if I decide to do so) so that I don't have heavier mortgage payments than anticipated. At current interest rate levels I could manage to "cram the mortgage" into a 15 year term, but obviously interest rates will normalise at some point and then a 15 year term would be unaffordable (hence why I want the standard 25 year term).

Can I ask please which building societies/banks I can go to for the very standard mortgage I require please?

Who have other people over 50 got their mortgage from?

TrickyDicky101

I'm not a mortgage adviser so can't offer suggestions of potential sources for mortgages but what I will say is that were you to agree a 15 year term and take out a 5 year fix say, you would be confident of your payments not rising in response to increases in the base rate for at least 5 years and, given the much shorter term compared to a standard 25 year term, each repayment you make has a higher capital repayment component and thus the entire repayment amount is less sensitive to interest rate movements. If you also consider you could (if you have funds available) make overpayments within the 5 years (Nationwide allows up to £500 per month over and above the standard amount), you could thus protect yourself further from interest rate rises by more swiftly reducing the capital balance on which the interest is charged (you could also reduce the term over which your mortgage runs via this route).

getmore4less

The fisrt thing you need to do is get "I just want a standard mortgage" out of your head.

Many lenders versions of these are more expensive than other options.

etc (ie any of the stuff that has come up as ways to manage to get a mortgage for the housebuyer, excuses to make charges by the mortgage lender, etc).


These old mortgage you talk about were a type of tracker and the lenders could mess you about more than other options, the lender decided the rate of the SVR.

If you want a no hastle simple mortgage that the lender canot mess with and no ongoing fees, then probably the best option is one of the low cost trackers.

You are also probably going to have to show that you have income into retirement if you want a longer term, eg good occupational pension.

Looking at your requirement of £40k say at 5%
over 15y £316
over 25y £234

I wouldsay if £300 ish a month is not aforadable you should review you budget and borrowing requirements.

What are you long tem income forcasts, pensions lump sums?

Jenniefour

I'm over 50 and just getting a mortgage - Woolwich. Like you, I imagine, massive cash deposit and small mortgage needed. I am getting an 11 year mortgage which would bring me up to retirement age. So I will definitely know the mortgage is paid off by retirement and intend to pay it all off much earlier than that because (even if interest rates go up) the monthly payments are more than manageable. I do not want a mortgage after I retire - and the fact that you are trying to do that might suggest you are aiming too high, buying a property that over time is not within your means.

If you will have a very big cash deposit you will have access to much better deals re interest rates. Have you done the calculations about what your monthly repayments would be for the amount you think you want to borrow? If not, do that first.

Jenniefour

I see getmore4less has done some calculations - with a big deposit you will have access to much better rates than 5%, try the calcs at 3.5%.

I imagine there are lenders who will give you a longer term beyond retirement age - providing you will have a big enough pension to support it. Most lenders these days look at affordability - what your monthly outgoings are and so on and will also factor in a rise in interest rates. But, why not go for a much shorter term - that will save you a lot of money in interest over the term of the mortgage.

And just to add - I am going through a whole of market broker. I would recommend it, they will be able to advise you properly on affordability etc. before any application is made. So you know what's possible and so on before any lender is approached - it's their job to identify the lenders they believe will best suit your individual circumstances.

getmore4less

it's not current rates you have to be able to pay it is likely future rates and 5% is a reasonable guess. You need to target payments at that sort of level just in case.

If a payment that is £80 more(25y-15y) makes a mortgage unaffordable that suggests a very tight budget and other unexpected expences could easily become an issue over that period. I would want a bit more slack in my budget.

Starting with lower rates and overpaying is another way to hedge rate rises.

long term income forcasts are the key to longer term morgages

Not looked or a week or two but for good LTV <60% a good benchmark is HSBC but they do have other tight criteria you have to meet like salary levels.

Lifetime tracker 2.29% £99 fee.
5year fix at 4.59% £999 fee

Conrad

UNDERWRITING> Be aware that any term that extends beyond 65 will usualy require the applicant to demonstrate how the mortgage will be paid after that age. I always approach this with great caution, as one wrong word in your answer can lead to a decline.
Simply saying 'you can work to 75', will often not be sufficient.
You can thank FSA regulation for this sort of thing as the regulator places a considerable burden on lenders to demonstrate lending is sustainable for the LIFE OF THE MORTGAGE.

Some older people end up having to go for a Buy To Let mortgage where the term can be to age 90 - but it's not ideal.

anoneemouse

getmore4less wrote: »

The fisrt thing you need to do is get "I just want a standard mortgage" out of your head.

Many lenders versions of these are more expensive than other options.

etc (ie any of the stuff that has come up as ways to manage to get a mortgage for the housebuyer, excuses to make charges by the mortgage lender, etc).


These old mortgage you talk about were a type of tracker and the lenders could mess you about more than other options, the lender decided the rate of the SVR.

If you want a no hastle simple mortgage that the lender canot mess with and no ongoing fees, then probably the best option is one of the low cost trackers.

You are also probably going to have to show that you have income into retirement if you want a longer term, eg good occupational pension.

Looking at your requirement of £40k say at 5%
over 15y £316
over 25y £234

I wouldsay if £300 ish a month is not aforadable you should review you budget and borrowing requirements.

What are you long tem income forcasts, pensions lump sums?

Thank you for those figures. That was my rough estimate of what my costs would be and hence feeling it would be affordable at a 25 year mortgage term and more of a struggle over 15 years. I will be retiring pretty early on into the mortgage, but the income figures in retirement allow for continuing with mortgage payments without a problem. I can provide proof, if required, of pensions due - both occupational and State.

So it looks as if it might be low cost tracker so far from what you say.

I have had to forget about Nationwide because of their requirement to have a mortgage term finish by 75 years old. I have now got an agreement in principle for a mortgage from the Leeds Building Society without any problem about my age.

anoneemouse

Having run through the Leeds Building Society website whilst working out the current procedures on this and found it pretty clear and easy to understand there was one possible issue.

They wrote out blow by blow accounts of the "how to sell existing house" and "how to buy new house" procedures. So far so good. The one thing I am a bit concerned about is the way the "how to buy" procedure said that the stage prior to:

"complete purchase and sale on the agreed date" stated

"exchange contracts, pay deposit".

I am a little confused as to how I would actually "pay deposit" out of the money tied-up in my current house. I know this sounds like Idiots Guide to Homebuying to ask this - but would I use the deposit from whoever bought my first house to put down as my deposit on the house I moved to?

If this was not enough to do so or it was not allowed for me to do so, then where does the deposit actually come from in between "exchange of contracts" and "completion". I know it is presumably only a few weeks, but there isn't any money physically there in the bank spare and available to be used to "loan out" as a deposit whilst I waited for the money from the sale of my existing house to come to me.

As I would be putting up an estimated 85% deposit on the new house and could prove I do have that amount of money available obviously, then would it just be accepted that I do have the standard deposit and more on the one hand or would my mortgage company have to hand over sufficient of the mortgage money in advance of completion for me to be able to hand over deposit money at exchange of contract time on the other hand. How is this issue dealt with please?

(Sorry to sound like an utter learner on this).

foreversummer

Don't worry. You don't physically have to pay the deposit - the proceeds will come for the sale. Solicitor will sort all of that.

You are however liable if you pull out between exchange and completion.

Foreversummer