Whether you're buying, refinancing, or considering a reverse mortgage in your retirement years, there are options available. Age alone doesn't disqualify you, but lenders do look at things differently.
Can Seniors Get Mortgages?
Yes! Age discrimination in lending is illegal. However, lenders consider:
- Income sources in retirement
- Amortization that extends beyond typical working years
- Asset depletion considerations
Income in Retirement
Lenders accept various retirement income:
| Income Type | How It's Counted |
|---|---|
| CPP/OAS | Typically 100% |
| Pension income | Typically 100% |
| RRIF/LIF withdrawals | Often 100% |
| Investment income | 50-80% typically |
| Rental income | 50-80% typically |
The challenge isn't age—it's proving stable income.
Amortization Considerations
For seniors, lenders may:
- Limit amortization to expected income years
- Require proof income continues throughout term
- Consider pension and government benefits favorably
Exploring Mortgage Options in Retirement?
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Reverse Mortgages
Available to those 55+:
How they work:
- Borrow against home equity
- No monthly payments required
- Loan repaid when you sell or move out
- Access 10-55% of home value
Considerations:
- Higher interest rates than traditional mortgages
- Equity decreases over time
- Consider alternatives first
Alternatives to Reverse Mortgages
Before choosing a reverse mortgage, consider:
- HELOC – Access equity with lower rates
- Downsize – Sell and buy smaller
- Rent out a room – Supplement income
- Traditional mortgage – If you qualify
Refinancing in Retirement
Common reasons seniors refinance:
- Access equity for retirement expenses
- Consolidate debts
- Help children or grandchildren
- Home modifications for aging in place
FAQ
Q: Is there a maximum age for getting a mortgage?
A: No maximum age, but amortization may be limited based on income projections.
Q: Can pension income qualify me for a mortgage?
A: Yes. Stable pension income is viewed favorably by lenders.
Q: What about buying a smaller home after selling?
A: Downsizing is common. You may qualify without needing a mortgage at all.
Q: Should I pay off my mortgage before retiring?
A: Often recommended, but depends on your rates, other investments, and overall financial picture.
What's Next
Explore mortgage options for your retirement years. We can help you understand what's possible given your specific income and goals.
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