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Remortgaging Your Home in Retirement

Your property may be your most valued asset – and a form of retirement savings. This guide runs through remortgaging in retirement, some of the specialist products available, and how to find the most suitable lender.

Remortgaging Your Home in Retirement

Many homeowners look to remortgage in retirement, and there are lots of reasons you might choose to do so.

You can release equity to cover a purchase or home improvements and reduce your interest rates to lower your monthly outgoings.

If you are already retired or approaching retirement age, it is essential to consult an experienced broker to ensure you apply to the right lenders, offering the most competitive rates.

Contact the mortgage brokers team for more information on 0330 304 3040, or via email at [email protected].

Can I Remortgage if I am Retired?

Yes, you can - although a high street lender might have more complicated eligibility requirements. The challenge is that you are less likely to be earning a stable salary, and will usually have a lower annual income.

Many mainstream lenders consider retired applicants higher risk. However, Revolution Brokers works with a network of respected lenders who specialise in later-life remortgages, for applicants up to 65, 75, or higher.

Age restrictions depend on the lender, with some providers considering your age on the application and others your age at the end of the mortgage term.

Most high street lenders are reluctant to lend to applicants who will be older than 70-85 at the end of the mortgage period.

If you have been unable to remortgage through your lender, or want to compare rates available from specialist later-life lenders, give Revolution a call on 0330 304 3040.

About Your Mortgage
Single or joint mortgage?
What’s your yearly income?

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Do you receive a regular bonus?

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Based On Your Yearly Income, You May Be Able To Borrow

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Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

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Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

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Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

Can I Get a Remortgage if I am Over 60?

Many lenders will offer a remortgage to applicants in their 50's, with a standard 25-year term being usual. Affordability requirements still apply and are usually easier to meet at this age when most people earn the most income and have lower expenses.

If you want to remortgage past 60, the lenders you can apply to become fewer. Many will offer to lend, but only on a shorter ten to 15 year period.

Should you be looking to retire between 65 and 70, or have chosen early retirement, most lenders will ask about the following:

  • Your pension plans and income.
  • Any investments or post-retirement income.
  • Your anticipated retirement date.
  • How much your pension is worth.

Can I Remortgage Past Age 65?

You can indeed, although it is usually cheapest to work with an expert broker who can recommend a specialist lender.

High street banks rarely lend to older borrowers, whereas niche providers will happily remortgage for an applicant regardless of their age.

This is usually based on your income and affordability, whether that is from a pension or other source, and the amount of equity you own in your property.

Are There any Remortgage Products for People over 70?

As with remortgage applicants over 65, you can undoubtedly remortgage past 70 but will have fewer lenders who will offer a competitive rate.

Some lenders set their maximum borrower age at 75, others at 85, and some have no cap at all.

Given that lenders perceive an older borrower as higher risk, you might find that options for over 70s applicants are more expensive, or carry extra conditions. It is therefore essential to work with a broker who can negotiate these on your behalf.

If you would like to remortgage at over 60, over 65, or over 70, experienced brokers can recommend the best later-life borrowers and ensure you don't end up paying over the odds.

What are the Best Remortgages for Retired Applicants?

Lots of lenders offer retirement remortgages, although the best ones depend on your circumstances.

Give us a call and let us know what you want to achieve from your remortgage, and we'll get the ball rolling!

Can I Get an Interest-Only Remortgage Later in Life?

Potentially yes. Interest-only later-life remortgages allow you to pay only the interest. The capital remains unpaid so that you can reduce your regular outgoings. Usually, the capital falls payable at the end of the term, which might be when you pass away or enter into care.

Interest-only retirement remortgages have the perk of cutting your costs.

However, there are risks to be aware of. The main issue is that you will need a plan for how the capital will be paid off. This could be through the sale of the property or another investment, but your lender will need to approve the repayment vehicle before offering a later-life interest-only remortgage.

The below illustrates what sort of repayment vehicles later-life borrowers tend to use, and how likely they are to be considered acceptable:

Repayment Vehicle

Likelihood of Acceptance

Endowments

Majority of lenders.

Stock and Shares (including ISAs)

Majority of lenders.

Other Investment Assets

Majority of lenders.

Personal Savings

Fewer lenders.

Sale of the Property

Fewer lenders.

Pension Fund

Fewer lenders.

As a Later-Life Borrower, Can I Switch to an Interest-Only Remortgage?

Some lenders will offer later-life interest-only options, but usually, specialist lenders are the best option.

The decision will depend on your repayment vehicle, as well as factors such as:

  • Credit rating and history.
  • Type of property.
  • Value of equity owned.

How do Guarantor Remortgages Work for Retired Borrowers?

Remortgages for later-life applicants can be supported by a guarantor, whereby a family member guarantees your mortgage and is liable if you don't keep up with the repayments.

Usually, a guarantor will need to either:

  • Provide their own property as security, or,
  • Secure the loan with savings held in escrow.

Guarantor retirement remortgages can be an excellent option if you have struggled to remortgage as a later-life borrower. They significantly reduce the risk factor to a prospective lender.

What Options are There Instead of Remortgaging Past Retirement?

Other borrowing options allow you to release equity from your home in retirement.

Equity Release Options for Retirees

Equity release is not the same as using a remortgage to release equity and is a product aimed at people over 55.

This type of lending is also called a lifetime mortgage and is a loan secured against the property where you do not need to make any monthly payments.

Interest is charged, but is added to the total loan value and becomes payable when the owner passes away or moves into care.

Equity release is a good option if you want a lump sum of cash - and do not need to explain what this is for. You can also stay in your own property, pay no tax on the capital loan, and not have to make any further mortgage repayments.

The big caveat is that you need to know what will happen when a family member inherits your property, and it can impact any benefits you receive that are means-tested.

Downsizing a Property Past Retirement

If you move to a smaller property, you can usually remortgage on more competitive rates, and reduce your outgoings. This is an alternative option to remortgaging an existing home.

Retirees who are widowed often choose to downsize to make life more comfortable, reduce their mortgage borrowing, or to cut down their regular outgoings.

It is always worth considering the other costs of moving home:

  • Estate Agents Fees
  • Legal costs
  • Mortgage charges
  • Removal charges
  • Stamp Duty
  • Valuation fees

Some of those fees might be waived depending on the remortgage product, but it's always essential to understand the full costs involved.

What Are the Remortgage Criteria for Older Applicants?

Lenders will consider several criteria as well as your age when deciding whether to approve a later-life remortgage application.

  • Credit History - if you have a clean credit file, your application is likely to be approved. If you have a low credit score, you can apply to bad credit remortgage specialists, and the rates offered will depend on the severity and timing of the issues.
  • Income - you'll need to prove you can afford the repayments, which could include pension, non-standard income or investment income.
  • Property - if you live in a non-standard property, such as a listed building or one with a thatched roof, you will almost always need to use a specialist lender to remortgage.
  • Expenses - lenders will consider any other debt, loans or outgoings in the affordability calculations to make sure you can keep up with the payments.

Professional Advice with Later-Life Remortgages

For tailored advice and support with remortgage past retirement, and help to find a specialist later-life lender, give the Revolution team a call on 0330 304 3040.

Our expert team can recommend the best lenders to apply to, and ensure you know all the pros and cons before choosing the best remortgage option for you.

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