A guide to mortgages for the over 60s

Much of the mortgage market in the UK appears to be aimed at first time buyers and middle aged families, but there is an expansive amount of activity in the mortgage market for people in their sixties, either leading up to or after retirement.

Homeowners who are over 55 years old and deciding what to do might look into a form of equity release called lifetime mortgages - alongside the traditional capital and interest or part and part mortgage solutions. Lifetime mortgages tend to be used by people who are over 60, have plenty of equity in their property and wish to release some of it without making repayments, or only making some contribution to the interest until the end of their lives. The outstanding mortgage and any unpaid interest are then paid from the borrowers estate.

Dependent upon circumstances the over 60`s may want to remortgage to borrow for: a holiday home, help family, improve their property or sort out some outstanding debts. Some might simply wish to remortgage for a period before downsizing or taking out equity release. Perhaps you have a solid pension coming with savings and want to move?. The key message is just because you`re slightly older than the average home buyer doesn`t mean that taking out a new mortgage or remortgage needs to be out of reach. It is estimated that more than 20 lenders in the UK currently accept mortgage applications from over sixties.

Alternatively if you`re over 60 and have proof that a repayment vehicle, such as an investment, is going to mature with enough money to clear the proposed mortgage you may be able to consider an interest only mortgage. These typically come with smaller repayments as you are only paying the interest, but the capital is not being repaid - so at the end of the term you will have to repay the mortgage or sell the property.

One further option that may be available to over 60s wanting to take out a new mortgage is a guarantor mortgage. This involves a named guarantor being responsible for taking on the mortgage repayments if the borrower is unable to. Clearly this is a complex area and it greatly depends on your retirement plans and income as well as what is the best route to meet your needs, so please seek professional advice before making any decisions.

Homeowner Secured Loans 9.8% APRC. Representative example: Borrow £50,000 over 180 months. 60 months at 8.1%, £497.83 pcm fixed at 60% LTV. Then 120 months at 10.1%, £539.89 pcm variable. Total payable £94,656.60. Total cost of credit £44,656.60 (including: £795 lender fee, £985 broker fee & £42,876.60 interest). First Choice are tied to certain loan providers.

Mortgages & Remortgages 8.4% APRC. Representative Example: Borrow £120,000 over 25 years at 5.99%, £778.86 pcm fixed for 3 years at 60% LTV. Then at 8.75%, £974.86 pcm, variable for 22 years. Total payable £286,416. Total cost of credit £166,416 (including: £985 broker fee, £999 lender fee & £164,432 interest)

Unsecured Personal Loans REPRESENTATIVE 49.9% APR (VARIABLE) First Choice are tied to certain unsecured lenders.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. Security is required on immovable property.

Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk

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First Choice Finance is a trading style of First Choice Funding Limited of 54, Wybersley Road, High Lane, Stockport, SK6 8HB. Copyright protected.