I am over 50 years old... Which banks can give me a mortgage?

Pilar is a 55-year-old woman who, due to life circumstances, has to sell the home she has lived in for years and buy a new house.

Thomas Osborne
Thomas Osborne
26 July 2022 Tuesday 00:59
17 Reads
I am over 50 years old... Which banks can give me a mortgage?

Pilar is a 55-year-old woman who, due to life circumstances, has to sell the home she has lived in for years and buy a new house. Since what she gets from the sale will not be enough to buy another property, she will have to ask the bank for a mortgage to get the rest of the money she needs.

And this is when a question arises that many adults who go through a similar situation ask themselves: is it possible to take out a mortgage loan when you are over 50 years old?

According to the financial comparator HelpMyCash.com, people over 50 years of age usually meet several essential requirements to get a mortgage. Since they have been working for a long time, they usually have a stable job, a good income and a more than decent level of savings. His age, however, is often a problem, because many banks do not allow the client to be more than 70 or 75 years old at the end of the loan term.

For this reason, the applicant will have to return the money in less time or look for entities that offer a less restrictive maximum age, for example, up to 80 years.

Banks do not want to offer long repayment terms to people over the age of five decades for a simple reason: the older the customer, the more likely they are to die before paying off the mortgage. If, in addition, you do not have heirs to take care of that debt (or they reject the inheritance), the entity will have to seize the house and put it up for auction, which does not ensure that you recover the borrowed money.

To minimize this risk, most entities impose a maximum age at the end of 70 or 75 years. Thus, if the person requesting the mortgage is 55 years old like Pilar, the term to return the money may not exceed 15 or 20 years, respectively. By not being able to settle the debt in a longer time, the loan installments will be more expensive and the mortgagee will need to collect a higher income to pay them.

Still, according to HelpMyCash, there are a few banks that are more forgiving of older customers and offer a maximum age at the end of up to 80 years. In this way, an applicant like Pilar will be able to repay the money in up to 25 years, which is a period that allows her to pay more affordable installments. When the mortgage is requested as a couple, these entities usually take into account the age of the youngest holder to impose that limit.

So, what are those entities that extend the maximum age that the applicant of their mortgages can have to pay off the debt to 80 years? One of them is Openbank, a virtual finance company that belongs to Banco Santander. The conditions of their mortgage loans, moreover, are among the best in the market. For example, its Fixed Open Mortgage has an interest rate of 1.92%, which can be obtained if 150,000 euros or more are requested and if the client directs their income, takes out home and life insurance with the bank and subscribes to supplies of electricity and gas with Repsol.

Banco Mediolanum is another of the entities that allow the client to be up to 80 years old at the end of the term. Your Freedom Mortgage, whose interest is variable, also has competitive conditions: its rate is 1.50% fixed the first year and Euribor plus 0.99% for the following years, which can only be obtained in exchange for direct debiting the income and take out life insurance with the bank.

If the client does not have the time or desire to visit several entities to find out which ones offer that maximum age at the end of 80 years (or would be willing to negotiate an extension), they can also hire the services of a mortgage broker. This intermediary will save you time and money, because they will directly contact the banks that usually offer mortgages to people over 50 and will negotiate for better conditions than the applicant could obtain on their own.

Pilar has savings, a stable job and a salary that will allow her to pay her installments without problems. Therefore, she should not have any problems getting the mortgage, especially if she asks for it from banks with a maximum age of 80 years at the end. Now, since she is not sure if this is a good time to buy, she wonders if she could apply for the loan in about ten years, when she is already retired and collects her pension.

According to HelpMyCash, most banks consider that the pension is a valid source of income to contract a mortgage, especially due to its stability (the State is the one who guarantees them). It is essential, yes, that your monthly amount allows you to pay the loan without problems. For this, the sum of the mortgage installments plus those of other credits that the pensioner has in force cannot exceed 35% of the pension.

This must also be taken into account if a mortgage is requested a few years before retirement. In these cases, it is recommended that the client calculate how much he will receive as a pension to ensure that he will not exceed the aforementioned maximum percentage of indebtedness.

If that limit is exceeded, the chances of not being able to pay the loan will skyrocket, so in that case it is not advisable to go ahead with the operation.