Buying a house in your 60s can be smart for financial security (equity, stable costs) and freedom (renovations, legacy), but it depends heavily on your income, health, lifestyle goals, and how long you plan to stay; it's wise if you have ample cash/income for a mortgage, can handle maintenance (or pay for help), and choose an age-friendly, lower-maintenance property, but risky if you plan to move soon or if large unexpected costs (health/repairs) could deplete savings, as mentioned in sources like SmartAsset.com, U.S. News Real Estate, and Realtor.com.
Older adults and retirees have the same mortgage options as any borrower, plus one type (reverse mortgages). Here are nine types to consider: Conventional loan: You can find conventional mortgages from virtually every type of lender, in terms ranging from eight to 30 years.
It's still possible to get a mortgage even if you're retired. Lenders will consider pension, Social Security, and investment income as your regular income. They will consider your annuity, survivor, or spousal benefits and retirement account income as long as you can prove it will continue for at least 3 years.
In 1998, 26% of Americans ages 65-74 held home-secured debt such as mortgages, yet by 2022, that grew to 32.2%. 1 This trend is particularly pronounced among those ages 75 and up, with 27.6% holding home-secured debt in 2022, up from 11.6% in 1998.
Mortgages make up about 70% of household balances. Conventional wisdom has long recommended that homeowners pay off their mortgage before retiring. Yet over the past three decades, more older adults are carrying their mortgage into retirement, while the amount owed has increased dramatically.
The security and stability of owning a home could provide peace of mind for senior citizens who may want to stay put for longer periods of time without worrying about moving. They also won't have to worry about rent payments going up and may find budgeting easier with a mortgage loan thanks to fixed mortgage payments.
8 Tips on How to Age Gracefully in Your 60s
A reverse mortgage, also known as a home equity conversion mortgage (HECM), is the most common mortgage taken out by seniors: Backed by the FHA, it allows homeowners 62 and older to borrow against their home's value.
Members of [the Boomer] generation have an average median net worth between $200,000 and $255,000, according to the Federal Reserve's 2019 Survey of Consumer Finances. Their mean net worth sits roughly between $970,000 and $1.2 million.
Recent analysis from ResiClub using U.S. Census data found that over 40% of owner-occupied homes are now owned free and clear—the highest share ever recorded. That means four in ten homeowners are enjoying life without a monthly mortgage payment.
If you're planning to retire in the next few years, waiting could mean facing higher home prices or interest rates, or both. If you find a home you love that fits your retirement lifestyle now, buying it sooner rather than later could actually save you money in the long run.
55 years old: Almost all lenders will require a written exit strategy, evidence of your superannuation and other assets that can be sold to repay the proposed debt. 60 years old: Most banks are likely to decline your application due to your age.
At age 60, you can get various free or discounted services like free eye exams, discounted transit/movies/restaurants, free tax prep (AARP), and potentially free healthcare/food assistance (based on income/location), plus enjoy perks like discounted National Park passes and free college tuition at some public universities for residents. Benefits vary by location and income, so check local programs like SNAP or Area Agencies on Aging.
Red flags when buying a house include structural issues (foundation cracks, sloping floors), water problems (stains, musty smells, basement flooding signs, poor drainage), sloppy renovations (fresh paint covering damage, crooked finishes, DIY work), bad maintenance (old roof, deferred upkeep), and listing/market oddities (long time on market, multiple price drops, little info). Always get a professional inspection to uncover hidden issues with major systems like electrical, plumbing, HVAC, and roofing before buying.
The $1,000 a month rule is a retirement guideline suggesting you need about $240,000 saved for every $1,000 per month in desired income, based on a 5% annual withdrawal rate (5% of $240k is $12k/year, or $1k/month). It's a simple way to set savings goals, but it doesn't account for inflation, taxes, or other income like Social Security, so it's best used as a starting point, not a complete plan.
Key Takeaways. Paying off your mortgage before retirement can lower monthly costs and interest payments, giving you more financial freedom. Not having a mortgage in retirement means fewer bills and can help manage unexpected costs better.
Suze Orman strongly advocates paying off your mortgage by retirement for financial freedom and peace of mind, but her advice on how varies by situation, often prioritizing a solid emergency fund and retirement savings first, especially if interest rates are low. While she pushes for paying down debt aggressively (even reducing retirement savings beyond the 401(k) match), she cautions against draining savings for low-interest mortgages if it leaves you vulnerable to job loss or emergencies, suggesting you should have a strong safety net before using savings to pay it off.