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Changing lifestyles and affordability challenges mean a growing number of people are buying their first home in their 50s and 60s. Stepping onto the property ladder later in life can still be rewarding and financially worthwhile, but it could present some additional obstacles to overcome.

According to data from Legal & General, in the first three months of 2024, there was a 13% increase of 56–65-year-olds searching for their first property when compared to the same period last year.

While older people represent a small portion of first-time buyers – around 2.5% are over 55 – it’s a figure that’s likely to continue growing as younger generations struggle to save a deposit and be in a position to secure a mortgage.

If you’re planning to buy your first home later in life, here are four tips that could prove useful when you’re searching for a mortgage.

1. Put down a larger deposit if possible

First-time buyers often put down a 10% deposit to secure their mortgage, and some lenders will accept a 5% deposit. However, if you’re buying later in life, you might want to consider putting down a larger deposit if you’re in a position to do so.

Putting down a larger sum means you’ll be asking to borrow less money from a lender and could reassure them that you’re financially prudent. Both these factors could make your mortgage application more attractive to lenders.

A larger deposit typically means a lender will view you as posing less of a risk too. This means you could access a lower rate of interest, which would cut your monthly repayments and the total amount you pay over the mortgage term.

2. Apply for a mortgage with a shorter term

Traditionally, first-time buyers have taken out a mortgage over 25 years. However, as house prices have increased, paying a mortgage over 35, or even 40, years has become more common.

One of the challenges of buying a home when you’re older is that lenders will often want the mortgage term to finish before you retire. As a result, applying for a mortgage with a shorter term could help you secure the finance you need to buy your home.

As you’d be repaying the amount you borrow quicker, a shorter mortgage term will usually mean your monthly repayments are higher. For example, if you borrowed £200,000 through a repayment mortgage with an interest rate of 4.5%, your repayments would be:

  • £1,013 with a 30-year mortgage term
  • £1,265 with a 20-year mortgage term.

The good news is that by choosing a shorter mortgage term, you’ll often pay less interest overall. Using the same scenario as above, you’d pay almost £165,000 interest with a 30-year mortgage. This sum falls to less than £105,000 if you choose a 20-year mortgage – saving you around £60,000 in interest.

So, it’s important to assess the impact a shorter mortgage term could have on your monthly budget and long-term finances.

3. Include all your income sources on your mortgage application

A lender will want evidence that you can meet the monthly mortgage repayments. Usually, this involves demonstrating your salary. As an older buyer, you might have other sources of income that you could use as well.

For instance, if you receive a regular income from a pension, you might want to include this alongside your income from work. You could also provide evidence of income from investments or other assets.

Incorporating other income streams might allow you to borrow a larger sum to secure your home. It may also ease concerns lenders might have about how you’d manage your repayments if you retired during the mortgage term.

4. Choose a lender that’s right for you

It’s not just high street banks you can approach for a mortgage, there are a lot of lenders to choose from. As an older first-time buyer, you might benefit from working with a specialist lender.

A specialist lender might be more likely to consider offering a mortgage with a longer term even if you’re nearing retirement or take into account sources of income besides your salary. A mortgage broker could help you assess which lender might be right for you and more likely to approve your application.

If you’d like to arrange a meeting to talk about how we could help you buy your first home, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.