Mortgage term past retirement age

Late1stTimeBuyer

Hi, 
I'm a little late to the house buying game and we're thinking of buying in the not too distant future. The typical mortgage term is 25 years, but can you get that if it will take you past retirement age? 
I'm currently 43 and have a retirement age of 67, what options would there be for mortgage terms? Would I get a 25 year term? Or would I have to get a term that ends before my retirement age? 
Thanks

MovingForwards

Late1stTimeBuyer said:

Hi, 
I'm a little late to the house buying game and we're thinking of buying in the not too distant future. The typical mortgage term is 25 years, but can you get that if it will take you past retirement age? 
I'm currently 43 and have a retirement age of 67, what options would there be for mortgage terms? Would I get a 25 year term? Or would I have to get a term that ends before my retirement age? 
Thanks

Yes, you can borrow beyond retirement, subject to having the income to cover it eg work / private  pension not just state pension and lenders criteria.

25+ year term, depends on the above.

Depends on the lender.

Speak with a broker, read through several lenders criteria (just search lender name mortgage criteria for intermediaries) so you can get a feel for what their requirements, have a play with mortgage calculators eg nationwide, Halifax, Barclays etc to get a feel for how lenders vary.

Do not do a decision in principle as some do hard credit searches.

Late1stTimeBuyer

Thanks got the advice. 
Work pension is a pretty good scheme with lump sum and pension payments so should cover it past retirement. Our intention would be to overpay with a view to paying it back before the end of the 25 year term, but the lower payments of the 25 year term offer some flexibility. 

MovingForwards

I'm a year older, just completed / moved and have a 23 year term, my intention is to overpay and clear it in 10 years, but my mortgage is 'only' 3x my annual salary.

There isn't a vast monthly payment difference between 23 and 25 year, for me anyway.

The mortgage overpayment calculator is  usefult have a play with, as it lets you mess around with figures, see what the differences are and how to plot to pay to down.

Usually it's 10% overpayments which can be made per year in fixed rate mortgages.

Late1stTimeBuyer

MovingForwards said:

I'm a year older, just completed / moved and have a 23 year term, my intention is to overpay and clear it in 10 years, but my mortgage is 'only' 3x my annual salary.

There isn't a vast monthly payment difference between 23 and 25 year, for me anyway.

The mortgage overpayment calculator is  usefult have a play with, as it lets you mess around with figures, see what the differences are and how to plot to pay to down.

Usually it's 10% overpayments which can be made per year in fixed rate mortgages.

Did you go for the 23 year term to give you more options or just because some lenders wouldn't lend past retirement age? 
My intentions were to get the lowest monthly payment I could get and then overpay to around the same amount as our current rent is.

MovingForwards

I'm a special case as I'm with a sub-prime lender (failed marriage / financially scared). 

Even if it was a mainstream lender I still would have done the 23 years, rather than into retirement. Just never felt comfortable with that idea.

For the remainder of this year I'm rounding up my mortgage, whilst building savings back up, after that it's full steam ahead with overpayments, remortgage in a few years to a mainstream lender and big overpayments to get it gone.

Unless you have a fabulous pension pot already, which you are still adding to each payday, you also need to think of that too.

Late1stTimeBuyer

I'm quite lucky in that my pension is pretty good as I work for the NHS. So I could use that to sort the mortgage on retirement. 
I'll play with the calculators and see what the term does to the monthly payments. Thanks for your advice so far. 

MovingForwards

Your NHS pension would be fine for lending into retirement.

Once you've had a play, worked your numbers out, come back if you've any other queries.

Thrugelmir

Set the term according to the monthly payments that are most manageable.  No one can forecast the future direction of interest rates. An increase above the current level would increase your monthly outgoings. If the capital balance owed is lower then the impact will be lower. Debt only has to be repaid once it is. The quicker it is the less interest you'll incur. 

Windofchange

Late1stTimeBuyer said:

I'm quite lucky in that my pension is pretty good as I work for the NHS. So I could use that to sort the mortgage on retirement. 
I'll play with the calculators and see what the term does to the monthly payments. Thanks for your advice so far. 

Myself and the other half are NHS, and I am a year behind you at the tender age of 42. I got a 27 year mortgage to take me to 70 with the Halifax no problems. Just state you are going to retire at 70? They didn't seem to ask any questions, though we did go through a broker. 

gabby71

This was interesting to me, I’m a first time buyer at 48! Unfortunately Covid has put everything on hold at present, hoping to buy the house I currently rent!