In fact, lenders cannot discriminate based on age due to regulations such as the Equal Credit Opportunity Act. This means that older adults in their 70s, 80s or beyond can apply for—and obtain—a 30-year mortgage.
Summary: maximum age limits for mortgages
Many lenders impose an age cap at 65 - 70, but will allow the mortgage to continue into retirement if affordability is sufficient. Lender choices become more limited, but some will cap at age 75 and a handful up to 80 if eligibility criteria are met.
Age doesn't matter. Counterintuitive as it may sound, your loan application for a mortgage to be repaid over 30 years looks the same to lenders whether you are 90 years old or 40.
Despite laws prohibiting lending discrimination on the basis of age, it can still be challenging for seniors to qualify for financing. In fact, a 2023 working paper out of the Federal Reserve Bank of Philadelphia found the rejection rate on mortgage applications rises steadily as people age.
Yes, there are home loans specifically designed for people on Social Security. These include government-backed options like FHA loan, VA loans and specialized products from private lenders. Reverse mortgages are another option, particularly tailored for seniors.
Buying a home after 60 can make sense if you have sufficient monthly income and find an affordable home. In addition, if you're physically capable of maintaining the home or can pay for extra help, homeownership won't become burdensome.
"If you want to find financial freedom, you need to retire all debt — and yes that includes your mortgage," the personal finance author and co-host of ABC's "Shark Tank" tells CNBC Make It. You should aim to have everything paid off, from student loans to credit card debt, by age 45, O'Leary says.
Mortgage debt remains uncommon among homeowners age 65-plus relative to their younger counterparts; in fact, the fraction of homeowners age 65-plus who had a mortgage in 2022 (34 percent) was less than half that of homeowners under age 65 (70 percent) 3.
Lenders are not allowed to refuse to consider income from your part-time employment, pension, and certain other sources. A lender generally can't deny your loan application or charge you higher interest rates or fees because of your age.
There is no age limit to a mortgage application. If you have a substantial down payment and a steady income (which can include pension and Social Security payments), you have a good chance of approval regardless of your age.
Can a 70-year-old choose between a 15- and a 30-year mortgage? Absolutely. The Equal Credit Opportunity Act's protections extend to your mortgage term. Mortgage lenders can't deny you a specific loan term on the basis of age.
Mortgages for over 70s FAQs
Yes, so long as your retirement income is able to cover the cost of the mortgage repayments, being retired shouldn't prevent you from getting a mortgage.
Borrowers receiving Social Security benefits can use that income to qualify for a mortgage, including Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). Lenders will evaluate your gross Social Security benefit because they use your gross income to qualify you for a loan.
Reverse mortgages offer older adults a way to use their home equity to fund their retirement. Anyone seeking a reverse mortgage must get reverse mortgage counseling before taking out a loan. NCOA offers tips and resources for older homeowners to use when considering whether to take out a reverse mortgage.
It's a loan that allows homeowners aged 62+ to tap into some of their home equity for additional cash: Without having to sell the home. Without having to make monthly mortgage payments (keeping current with property taxes, insurance, and maintenance required)
But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.
Determine your maximum monthly mortgage for a $70,000 salary
To calculate your maximum monthly mortgage payment, multiply your gross monthly income by 0.28. On a $70,000 income, your monthly mortgage payment should be no more than $1,633.
The minimum age for a residential mortgage is 18 (21 for buy-to-let). While there's no fixed maximum age, lenders establish their criteria, typically capping between 65 and 80. Individual factors such as income, employment status, and credit history influence eligibility.
An unmortgaged home was once a retirement perk
Mark Iwry, nonresident senior fellow at the Brookings Institution. But that pattern is changing. In the Michigan study, researchers found that the share of retirement-age homeowners with mortgages rose from 38% to 51% in a generational span of about 25 years.
"Shark Tank" investor Kevin O'Leary has said the ideal age to be debt-free is 45, especially if you want to retire by age 60. Being debt-free — including paying off your mortgage — by your mid-40s puts you on the early path toward success, O'Leary argued.
This problem has become more pressing over the years. Half of the retired homeowners who were born in the early years of the baby boom wave are still making mortgage payments. They are in a very different situation than their parents' generation when the majority of retirees owned their homes free and clear.
And, age isn't a determining factor in whether you can repay your mortgage, Michele Albohn, a certified mortgage advisor at Compass Mortgage, says. "There is no reason why a senior cannot apply for a mortgage," Albohn says. "You do not have to prove that you will live 30 years to pay off the mortgage.
Age isn't a limiting factor, but your income and mobility may be. If you've built up your savings over the years, you may not want a mortgage, preferring to buy a house outright.
According to some experts, the optimal range for home-ownership is between 10% and 30% of your net worth. Rental properties and passive income: Rental properties are another common and attractive form of real estate.