0808 189 0463


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        Getting a Mortgage With Pension Income

        Looking for a mortgage based on pension income? The experts we work with know exactly how to make this possible.

        Are you looking to use pension income on your mortgage application?

        No impact on your credit score

        Getting a mortgage based on pension income is absolutely possible.

        In fact, it can be easier than you think, so in this article we’ll show you how to increase your chances of being approved for a pension mortgage and landing your dream retirement home.

        Can you use your pension to get a mortgage?

        Absolutely. In fact, there are a few specialised mortgage providers who offer some quite attractive retirement mortgages for pensioners.

        The good news is that many are much more flexible when it comes to age limits when compared to high street lenders, such as mainstream banks and building societies.

        They also offer a wide range of mortgages to suit older borrowers, such as lifetime mortgages or equity release.

        Get Started with a Broker

        Maximise your chance of approval with specialist advice from a mortgage expert.

        How to begin your application

        Do plenty of research first and find out if you are eligible to apply for a mortgage while on a pension.

        As there are only relatively few lenders willing to accept an application from someone on a pension, finding a mortgage advisor or broker who specialises in mortgages for pensioners is essential.

        Draw up a budget

        Mortgage providers want to be confident that you can afford the monthly mortgage payments, so preparing a budget detailing exactly how much pension income you have in addition to any other sources of capital is essential.

        Optimise your credit report

        It is recommended that you don’t take out any new loans or financial commitments in the weeks or months before applying for a mortgage because this could confuse lenders who are trying to assess your mortgage requirements.

        Ensure all your utility bills, credit and loan repayments are up to date and are paid promptly. Mortgage lenders want to be confident that you are financially responsible and a good risk for the loan you want to take out.

        You can use credit reference agencies, such as Experian, to help you flag up any potential problems and pre-arm you against them, before your lenders do their own credit search.

        Their services are free and well worth the time.

        If you have any poor credit history, it might be worth delaying the mortgage application for a couple of months while you rebuild your credit rating.

        Finding the right broker

        To kick off your application, you should find a mortgage broker who specialises helping customers get approved for finance based on their pension income – this is something we can help you with through our free broker-matching service.

        We can introduce you to the right mortgage broker, in this case one we will handpick because they specialise in pension income and helping customers just like you get a mortgage based on it.

        Make an enquiry to be matched with your ideal mortgage advisor today.

        Our Broker-Matching Service Guaranteed!

        We want you to have complete confidence in our service, and get the best chance of securing your mortgage. We guarantee to get your mortgage approved where others can’t – or we’ll give you £100*

        Learn More
        Mortgage Approval Guarantee or £100 back

        How easy is it for an older person to apply for a mortgage?

        With a few stipulations, it’s not that much different for an older person to apply for a mortgage, providing they meet the usual criteria.

        These include-

        • Affordability: Essentially, can you meet the repayments over the full term of the mortgage? Every lender has different criteria when it comes to determining affordability. It’s based on your income (which can include pensions) and your outgoings. Most lenders will lend 4-4.5 times your annual income, while others may extend that to 5 times your income, and a tiny handful may accept 6 times your income.
        • Deposit: The larger the deposit you can put down, the better your chances of securing a mortgage. Most lenders require a minimum of at least 5-10% deposit. Your choice of lenders will increase significantly if you have 10-15%, and if you have 20% or more, the deals on offer will be much more attractive.
        • Credit rating: The better your credit rating, the lower the potential risk to mortgage providers, and the more likely they are to approve your application. A poor credit history can incur higher interest rates as you are seen as more of a risk.

        If you are unsure of your eligibility, then you should talk to an experienced mortgage broker, preferably one who specialises in mortgages for older people or pensioners.

        Is there a maximum age limit?

        Most mortgage providers set their age limit at 75 years of age, but there are a few specialist lenders for pensioners and older borrowers, who are happy to accept applications from people up to 85 years old, and if you meet the right criteria, a few will not set an age limit at all.

        Potential alternatives to consider

        There are more options open to you if you already own your own home or another property, such as a holiday home or rental property.

        These could include-

        • Equity release mortgage: These are available to property owners over the age of 55 years old. It allows you to release some of the built-up equity in your home as cash. The upside is that you don’t have to make any repayments (unless you choose to). The original amount borrowed and interest is paid only when you die or go into long-term care. As with any major financial decision, talk with an expert first, to see whether equity release is right for you.
        • Remortgaging: Whether you fully own a property or still have a mortgage, you can remortgage to release equity.  Depending on what you want to do with the money, most lenders will set a cap on the loan-to-value (LTV). Most mortgage providers are more than happy to lend money for a second or holiday home, even a boat, caravan or car.
        • Retirement interest-only (RIO): There is a wide choice of lenders offering interest-only mortgages for over 55’s. A retirement interest-only mortgage is pretty much the same as a standard interest-only mortgage, except that there is no end date. The capital is only payable when the mortgage holder dies or goes into long-term care. Always take expert advice before going down this path.

        Get matched with a mortgage broker who specialises in pension income today

        While there are some obstacles to overcome when applying for a mortgage while on a pension, it’s not impossible.

        If you meet the mortgage providers criteria outlined above, there is no reason you shouldn’t be able to apply for a pension mortgage.

        But it is essential that you talk to an advisor or mortgage broker who is an expert in pensioner mortgages, someone who will provide the right advice and find you a mortgage deal that suits your own individual financial circumstances.

        Call 0808 189 0463 or make an enquiry to access our free broker-matching service.

        We will pair you with a mortgage advisor who specialises in helping older borrowers secure a mortgage with their pension income and arrange a free, no-obligation chat between you and them today.

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        We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects. Ask us a question and we'll get the best expert to help.

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        Pete Mugleston

        Pete Mugleston

        Mortgage Expert, MD

        About the author

        Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

        Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

        FCA Disclaimer

        *Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us as well as any of our own are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

        Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.