Retirement Mortgage

What Are Retirement Mortgages & Why You Need One

Are you retired & considering taking out an equity release plan? Well, we’re here to tell you everything you need to know about Retirement Mortgages, how they work & if they’re an option for you.
What Are Retirement Mortgages & Why You Need One

As is the case with most people close to retirement, mortgages are prevalent to consider. It’s a trendy thing to take out a mortgage even before retirement, thanks to the fear that they won’t be able to get a good and secure mortgage plan once they’ve retired.

There are many mortgage plans to choose from once you’re retired, thanks to mortgage providers catching on to this fear. Now, more than ever, it’s safe and comfortable to take out a mortgage once you’re retired.


One of these fantastic loan plans is Retirement Mortgages. They’re for pensioners or retirees who qualify to take out a loan against the market value of their property or house. Here’s a simple guide to these fantastic post-retirement plans.

Understanding Everything About Retirement Mortgages

Understanding Everything About Retirement Mortgages

Retirement mortgages are mortgages taken against the value of a property, and it can begin even before retirement or during retirement.

Simply put…

During the loan term, your mortgage provider will require cash or interest repayments, depending on the terms of the mortgage plan contract. These repayments will affect your total loan balance. Repayments also help to level up your balance. You make repayments for a fixed term: 10 or 15 years, or during the entire lifetime of your retirement mortgage plan.

Let me tell you something…

According to the lifetime mortgage structure, retirement mortgages can last until the last homeowner passes away or moves into permanent care. From that time onward, your plan provider will sell your property on the market, take their share loan balance, and the remaining money will go to any heirs.

What’s the Best Retirement Mortgage?

It depends on your lifestyle and financial situation. So, the best retirement mortgage plan is one that suits your lifestyle and financial circumstances perfectly. Providers look at your age, monthly and annual salary, the amount of cash you requested, and the property’s value.

Simply put…

Most lifetime mortgage plans require you to be 55 years or older. It’s the state retirement age1. Your home also has to be valued at £70,000 minimum. Mortgage providers assess your salary, which helps them prove your stable income. The providers will again ask you to show evidence of your retirement income to prove affordability.

Let me tell you.

If you’re taking out the loan in joint names, it will significantly influence the mortgage provider’s decision. The mortgage company will do a stress test for future affordability. They carefully calculate the implication of one partner dying, seeing if the survivor can continue paying off the mortgage independently.

What does this mean for you?

It means that it’s vital to get professional and financial advice before you take out the mortgage loan. They’ll discuss all the scenarios and requirement we’ve mentioned above. The financial advisor will also help you get the best possible mortgage deal according to your circumstances.

What Documentation Do I Need

What Documentation Do I Need?

The regulators’ reviewed the mortgage market (MMR) in April 20142. Based on their findings, the mortgage provider has the responsibility to prove your affordability. Therefore, it’s normal if you go through some thorough checks into your personal life and finances. In that case, before you retire, mortgage providers will generally want proof of:

  • Your employment at a company – the provider needs to see your P60. They’ll need to look into your state pension estimations, and any other occupational plan pension forecast, this is so they can see your retirement income and if you’ll be able to repay the loan.
  • Your self-employment – the provider will look at three years’ worth of financial accounts. Sometimes they want proof of your SA302’s and pension estimation.

If you’re already getting a generous pension(s), your provider will ask to assess these documents:

  • Your final annual Department of Work and Pensions (DWP)6 State Pension letter.
  • P60’s from all private and occupational pension plans.
  • Your last three months’ bank statements, as additional evidence of a secure pension income.

Moreover, some plan providers also see your investment income and drawdown finances as acceptable forms of income once you retire. So any other investments will determine the loan amount.

Is This A Good Option For Me

Is This A Good Option For Me?

If you want some money to fund your home renovation projects, help your kids onto the real estate investment market, pay for your holiday trips, pay off your debts, or to gain financial freedom in your golden years, retirement mortgages are for you.


Due to all those reasons, many financial institutions and mortgage companies have developed an alternative means of raising capital, retirement mortgages. These mortgage plans are specially made for homeowners needing a cash flow boost. So, if you need a retirement mortgage plan and you find yourself in these scenarios:

  • If your mortgage provider is pushing for outstanding, last mortgage balance repayment,
  • If you’re moving to a bungalow, retirement home, or closer to your kids for financial support,
  • If you want to give a deposit to help your kids onto the property investment ladder,
  • If you want to renovate your home or upgrade your kitchen,
  • If you need capital for a new vehicle, car insurance, a vacation in Dubai or any of the creature comforts, or you want to make your retirement luxurious and comfortable.

In any of these scenarios, you worked very hard, and you deserve the absolute best! There’s no need to struggle financially or to downsize to a smaller home when you retire. You can have a fantastic retirement with a trustworthy retirement mortgage plan. Therefore, go to your mortgage adviser today and take out the best mortgage plan for your future.

Common Questions

What’s A Retirement Mortgage?

How Does Retirement Mortgage Work?

Is A Retirement Mortgage A Good Idea?

Do I Qualify For A Retirement Mortgage?

In Conclusion

As is the case with most people close to retirement, mortgages and what to do about them become of prevalent thought. It’s a trendy thing to take out a mortgage even before retirement, thanks to the fear that they won’t be able to get a good and secure mortgage plan once they’ve retired. It’s so easy and quick nowadays. You won’t regret it!

We understand that when you are considering retirement then your next financial decision has to be one that benefits you. We resonate and empathize with the position you might be in that stage of your life therefore you should feel free to ask any other questions you need to ask. We’re here to help you.

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