I’m in my late 40s, but my new mortgage will end. Am I too late?

Is the mortgage market turmoil getting you down? Do you have a mortgage-related question you want answered? Send us an email and we will have one of our experts respond to you. Nick Mendes, Mortgage Technical Manager at John Charcol, shared his advice with a reader below. If you have a question for our experts, email us at [email protected].

Question: I’m looking to get a mortgage with my partner. This is my first home and I’m in my late 40s, having been a renter all my life – mostly in social housing. We can afford a property worth £200,000, but I fear a typical 25-year contract will take me well beyond retirement age. What are my options here for getting a good rate from a major lender? I assume most won’t let me borrow until I’m seventy?

Answer: It’s great to hear that you and your partner are considering taking your first step onto the property ladder. Moving from renting to owning a home is a big step, and I completely understand that you may have some concerns about taking out a mortgage later in life, especially if its term could be longer. extend well beyond your planned retirement age.

One of the main concerns you raised is that a typical 25-year mortgage term would mean deferring repayments until age 70, which can seem daunting given the uncertainties of retirement income. However, many lenders are becoming more flexible in their approach and are open to lending well beyond traditional age limits.

The lending landscape has evolved and aging no longer automatically prevents you from getting a mortgage. Today, many traditional lenders are willing to consider mortgage terms that extend into retirement, provided they are confident you can afford the repayments before and after you stop working.

The key factor here is affordability, and this is what lenders focus on when evaluating applications that extend into the retirement years. What they want to see is a clear indication of how you plan to deal with repayments once you are no longer working.

This means that when you apply you will need to provide details of your expected retirement income, which may come from a variety of sources including your state pension, occupational pension, private pension or any savings or investment you have.

Since you are applying for the mortgage jointly with your partner, the good news is that the lender will take both incomes into account. Lenders will evaluate these sources of income to determine whether you will be in a comfortable financial position to manage your monthly mortgage payments after retirement.

If a term of 25 years seems too long a commitment to you, it is also possible to consider a shorter mortgage term. For example, a term of 15 or 20 years would reduce the number of years of repayment, ensuring that the mortgage is paid off sooner, perhaps even before retirement. Of course, shorter terms mean higher monthly payments, which could put a more immediate strain on your finances. So it’s crucial to find a balance that works for you and your partner.

On the other hand, opting for a longer term could be useful if managing lower monthly repayments is more important to you at this stage. It’s about finding the sweet spot where repayments are manageable, now and in the future, while still giving you the security of homeownership.

To get a good rate from a major lender, the best place to start is to explore your options through a market-wide mortgage broker, as they have the advantage of being able to access a wide range of products and criteria which can help identify lenders who are particularly flexible when it comes to age and retirement criteria.

This can be extremely helpful, as not all lenders have the same rules or appetite for lending to older applicants. Some may have a maximum term end age of 70 or 75, while others extend even beyond that – especially if there is a solid financial plan in place.

You might also consider a fixed-rate mortgage, especially if you’re concerned about long-term affordability. With a fixed rate, your monthly payments remain the same, regardless of changes in interest rates, which can be reassuring as you approach retirement. Knowing that your repayments are predictable can make financial planning easier and give you greater peace of mind as your income changes later in life. Many lenders offer fixed-rate terms of up to 10 years or more, giving you added security.

Not all lenders are the same and there are many options that may suit your needs. Although some traditional lenders may have stricter age limits, there are also building societies and new lenders that have entered the market, such as Perenna., which do not have a maximum age for certain products, or April Mortgages, which could potentially lend up to the age of 80, which take a more holistic view of an applicant’s situation. Overall, lenders may consider a wide range of incomes and be willing to lend to borrowers over age 80. This means you have choices and with the right advice you can certainly find a lender willing to meet your needs.

While your concerns about a long-term mortgage in your late 40s are completely understandable, the good news is that many lenders are willing to work with borrowers like you. By working with a knowledgeable mortgage broker, you can explore the most suitable options available to you and obtain a rate that meets your needs. Whether you ultimately opt for a shorter-term mortgage or a longer-term deal with lower monthly payments, the most important thing is that it fits seamlessly into your financial plans.

I wish you good luck on your exciting journey to homeownership.