Mortgage terms for the over 40s

WeeCuppaCha

I hope to apply for a new mortgage (second time buyer) in early 2020, around the same time I turn 45.

I’m just wondering what my options are for mortgage term. I know some lenders will only lend up until 65, which would be only a 19 year term in my case. Do banks even allow an odd number such as 19 or are they tied to the increments of 5; 20, 25, 30 etc?

I believe term can be increased by some banks/institutions for those who have a pension? I have a permanent pensionable public sector job, although I will have only been employed 2.5 years at early 2020 so my pension pot will be very small. This will be increased through AVCs or buying back years by me in future years, but of course the banks won’t take my word for it at time of application.

Anyone have any information on the terms individual banks allow?

victor8600

Yes, in my experience, banks allow reasonable variation in the number of years. Also in my case, I had to show that the projected lump sum from my pension would be enough to cover the remainder of the mortgage.

Bandana boy

Got my last mortgage over 23 years so no issue on odd numbered years

jlm29

We have a 19 year mortgage

DelBoy Trotter

No issues with odd numbers. I recently got approved and the bank would lend until I was 68

Giblet

Pension does help with Ulster.

hellyeah

Got 23 year mortgage this year. In same position. Turned 43 this year. With aib.

theteal

I can't see why odd numbered years would be an issue. People remortgage all the time when moving lenders, there could be any number of years left when doing so..

Yourmama

Got 33 years at 35, with boi

Drifter50

Can`t go beyond 70 as I understand it. I got into trouble in 2008 with negative equity and did`nt get a deal untill 2015 when the new arrangementl the bank finally agreed would conclude when I am 70 going on 71

JDD

Public sector worker here too. We got approved last year for a 28 year mortgage with BOI and we were both 42 years old. I have been in my job a bit longer - 10 years - but you should still be grand.

Ray Palmer

It is really depressing to see people planning to have mortgages up to the new retirement age. If the retirement age hadn't been increased they couldn't do it. The thought of people paying a mortgage for 20 years after I am done. What are their pensions going to be like when they retire? The lump sums are for retirement not a mortgage.

WeeCuppaCha

Ray Palmer wrote: »

It is really depressing to see people planning to have mortgages up to the new retirement age. If the retirement age hadn't been increased they couldn't do it. The thought of people paying a mortgage for 20 years after I am done. What are their pensions going to be like when they retire? The lump sums are for retirement not a mortgage.

I appreciate what you’re saying here. However, from my own perspective, I have no intention of paying my mortgage until retirement age, although to be fair, it won’t be 20 years before as in your case. What I am able to bring to the table at 45 years young is a reduction in LTV with the sale of my previous property.

Additionally, mortgage applications don’t take into account increments in salaries, or extra monies earned in my profession for unsocial hours worked. My plan is to overpay as much as I can to get it cleared before the allowed term and also leave my future lump sum intact.

jlm29

WeeCuppaCha wrote: »

I appreciate what you’re saying here. However, from my own perspective, I have no intention of paying my mortgage until retirement age, although to be fair, it won’t be 20 years before as in your case. What I am able to bring to the table at 45 years young is a reduction in LTV with the sale of my previous property.

Additionally, mortgage applications don’t take into account increments in salaries, or extra monies earned in my profession for unsocial hours worked. My plan is to overpay as much as I can to get it cleared before the allowed term and also leave my future lump sum intact.

Similar situation here. When we drew down our mortgage, we had a couple of loans that were very nearly cleared. The banks affordability rules meant that we had to put it over 19 years, but realistically could have it cleared in 4-5 if we wanted. Also, my OH is ten years older than me, but it had to be paid back by the time he’s 65, even though I would still be working

DublinCJM

I've just been approved on a 19 year term with BoI, and I'll be 50 next year.

Ray Palmer

I think I misunderstood what people were saying. Assumed people were talking about their first mortgage with standard deposit. Different situation when upgrading.

I don't think the banks should consider salary increments or even people doing calculations. Increments get delayed and can be changed. There are plans to change the structures as is so salary scales may radically change. Civil servants do look at salary very differently to the private sector.

Saudades

Ray Palmer wrote: »

It is really depressing to see people planning to have mortgages up to the new retirement age. If the retirement age hadn't been increased they couldn't do it. The thought of people paying a mortgage for 20 years after I am done. What are their pensions going to be like when they retire? The lump sums are for retirement not a mortgage.

On the contrary, it's not depressing at all. In fact it's quite the opposite; getting a mortgage these days is an achievement, a celebration, even if you have to pay it off until you retire.

If someone can afford a mortgage, then their income is sufficient that they can afford to pay it off until they retire anyway.
So their pension won't need to be used to pay off any of the mortgage, unless the person wants to retire early.

What is depressing though is the thought of those still paying rent in their late 60's. In fact I don't even see how some renters will be able to retire at all; working until the day they die. Or becoming homeless if they can't work anymore due to old age / ill health. That's depressing.

How many thousands of current renters in Ireland would absolutely bite the hand off a bank for a mortgage even if it meant payments stretched out until age 68?

Technically though, there is no retirement age. There's state pension age; which is currently 66, set to rise to age 67 in 2021, and then 68 in 2028, but you can retire before or after the state pension age.

Ray Palmer

@Sausdades
While better than renting in retirement it is still not a great position to be in.

As you get older you are more likely to have health issues. Lots of people retire early due to health issues.

The craziness that has happened in the housing market has really put many at a huge disadvantage. Very easy to be working the same job as somebody else but be in hugely different financial circumstances just based on when you bought your home. That is depressing.

I know friends of mine have given up owning a property now. They could in theory get a mortgage to buy but after 45 if you don't have a huge deposit they won't give you a mortgage is what I have been told

JDD

Why is that though? Surely it's the same risk to the bank giving a twenty year mortgage to a 45 year old, as a thirty year mortgage to a thirty five year old? The shorter the term of the loan, the less interest you pay overall on the capital, I get that might not be as an attractive a prospect. But having said that, the shorter the term of the loan, the less risk to the bank.

I'd love to know the general age profiles for mortgage borrowers that go into arrears. I'd say there's a higher proportion in their thirties when money is stretched thinner when children are younger.

pwurple

Ray Palmer wrote: »

It is really depressing to see people planning to have mortgages up to the new retirement age. If the retirement age hadn't been increased they couldn't do it. The thought of people paying a mortgage for 20 years after I am done. What are their pensions going to be like when they retire? The lump sums are for retirement not a mortgage.

It's different in reality though isn't it... My first mortgage was a 35 year term. I never remotely intended it to last that long, and it's didn't last even half that in the end, overpaid it. Ditto on the second and third ones. Take it out with a good long term on it at the start to provide financial flexibility, and then overpay the sugar out of it to bring the term down quick as soon as you can.

TheShow

If you have a private pension they may let you go over 65 by a few years. no restriction on odd numbers etc.

whatever76

In process of drawing down a 200k mortgage for 22 years ( single FTB) … turn 44 next summer ( crying into my keyboard typing that age !!)

jimmycrackcorm

whatever76 wrote: »

In process of drawing down a 200k mortgage for 22 years ( single FTB) … turn 44 next summer ( crying into my keyboard typing that age !!)

I recently mortgaged 14 years to finish at 65 for a figure not far off that. I child have gone up to 68 afair

Glenbhoy

WeeCuppaCha wrote: »

I hope to apply for a new mortgage (second time buyer) in early 2020, around the same time I turn 45.

I’m just wondering what my options are for mortgage term. I know some lenders will only lend up until 65, which would be only a 19 year term in my case. Do banks even allow an odd number such as 19 or are they tied to the increments of 5; 20, 25, 30 etc?

I believe term can be increased by some banks/institutions for those who have a pension? I have a permanent pensionable public sector job, although I will have only been employed 2.5 years at early 2020 so my pension pot will be very small. This will be increased through AVCs or buying back years by me in future years, but of course the banks won’t take my word for it at time of application.

Anyone have any information on the terms individual banks allow?

As others have mentioned, boi can give u a 25yr term, presuming they're happy with all the other things that is!