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Pros and cons of having a mortgage up to age 85

This article is part of
Guide to mortgages in later life

Pros and cons of having a mortgage up to age 85

The main positive of lenders allowing people to have a mortgage up to the age of 85 is it gives more people the ability to buy a house where otherwise they might not have been able to.

Home ownership provides a security of tenure in older age which the private rental sector tends to lack, not to mention that monthly mortgage payments in the current environment are often cheaper than renting.

For people drawing on equity then the positives are also clear; being able to help children onto the housing ladder or to adapt their home to suit their needs in older age.

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But clearly there are also a number of things borrowers need to think about before making a significant financial commitment like taking out a mortgage.

It can be tough to talk about but joint borrowers need to be clear on how the mortgage would be paid if one of them were to fall seriously ill or die.

Inheritance is another thing to consider. Charlie Blagbrough, mortgage policy officer of the Building Societies Association, says life insurance might be a good idea to pay off any outstanding mortgage debt if the borrower dies.

Without life insurance Mr Blagbrough says the lender will expect to recoup the outstanding debt out of the borrower’s estate and that will clearly affect any inheritance they planned to pass on.

Mr Blagbrough says: “It might be a good idea to discuss this with family before making the commitment.”

It is also important for borrowers to think about how having a mortgage will affect other retirement plans.

For example, if a borrower has a desire to take cash out of their pension pot at the age of 55 then it probably isn’t a good idea to have a mortgage which relies on their pension income for repayment.

The BSA’s Mr Blagbrough says another thing he would suggest advisers flagging is registering for a Lasting Power of Attorney with the Office of the Public Guardian.

He says: “This will avoid a whole range of issues if a borrower develops a condition like Alzheimer’s or dementia in older age.”