Can you remortgage after 50?

Can you remortgage after 50?

author: Hayley Cox

By Hayley Cox

Yes – but it may be harder than if you remortgage at a younger age. It could also depend on the reason you’re remortgaging.

Let’s take a closer look.

Why are you remortgaging?

There are a number of reasons to remortgage, and your age may not be a significant factor in every case. For example, if it’s just a case that the particular fixed-rate or tracker mortgage deal has ended and you want to switch to a new mortgage rather than stay on your lender’s SVR, being aged over 50 may not be an issue.

However, if you want to remortgage in order to extend your borrowing, the lender may more closely consider your age. Borrowing more means either increasing the amount you pay each month or lengthening the term for which you’re making repayments.

If it’s a case that your mortgage term is extended and you’re over 50 years old, there’s an increased chance that you’ll have reached retirement age before you’ve finished paying off your mortgage. It’s this that can set alarm bells ringing for lenders.

Relaxing at home
What's your reason for remortgaging?

Why does age matter?

There are no hard and fast rules telling lenders what the age cut-off point is for mortgages and remortgaging. It all comes down to the individual lender.

Smaller lenders are likely to be more flexible to lending to you if you’re older, but there are more mainstream lenders offering to let people sign up to a mortgage term that will take them into their 70s or 80s – which is likely to be the case if you’re 50 when you apply.

Doing the maths
Work out the equity in your home.

A question of equity

Of course, remortgaging is a little different to taking out a completely new mortgage. When you remortgage, you already own your home and have been paying the mortgage on it for a while. This means you’re likely to have built up equity in the property, and how much equity you have is one thing that will be considered by the lender.

Let’s say your home is worth £200,000 (you may have paid less than this for it, but it’s the current market value that will be used by the lender) and you have £50,000 left on the mortgage. This means your loan to value is just 25% and three-quarters of your home’s value is equity.

It’s the equity you borrow against when you remortgage to borrow more - and the more you have, the better position you’re in. If you have a large mortgage and only a small amount of equity, lenders may be unwilling to lend you more regardless of your age.

Winter night
Think carefully before you remortgage.

Choosing the right term

If you’re in your 50s and you want to borrow more against your home by remortgaging, you may well be able to do so. But it’s not just the lender who will question whether this will put too much pressure on your finances – you should too.

Choosing to remortgage and extend your term is something you should think about carefully if you’re close to retirement age. Swapping the income from a job for a pension can leave you with less disposable income, but you’ll need to keep up with your mortgage payments regardless.

If you want to borrow more, perhaps to pay for home improvements, work out if it’s possible to pay more each month so you can clear the mortgage before you reach retirement. This may be something the lender suggests if they’re concerned about you still being in debt to them when you retire.

"How long you can realistically afford to pay your mortgage for?"

The alternative could be to work for longer if that’s an option – and it isn’t always. Of course, this is something else to consider carefully. While in your 50s you may feel fine doing your job, in ten years’ time it might be a different case.

There’s a lot to think about if you’re pondering remortgaging. If you’re in your 50s, you need to think carefully about how long you can realistically afford to pay your mortgage for, and whether you can afford to pay more each month. It’s something lenders will certainly consider – and if the figures don’t add up for them, you’re likely to be turned down.

Take the time to work out how much you can afford to borrow and how long you’ll need to make repayments for using a mortgage calculator like ours. You can also find out what you’re likely to be asked about when you apply here.

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Can you remortgage after 50? Can you remortgage after 50?