Can I Get a Mortgage at 47 Years Old?

The average age of first home buyers is increasing all the time due to ever increasing property prices. As it becomes more and more difficult to get onto the housing ladder, people are taking a longer time to build up enough deposit to pay for this first home, as well as taking time to increase their earnings in order to support the mortgage they need to buy the house that they want.

This has created a situation where many people are concerned about the upper age limits of borrowing for a mortgage.

Whilst this is something that you should be aware of, it's also important to keep in mind that banks can be flexible, especially for somebody who is still likely to be working for a plenty more years at age 47. Generally speaking, being a first time buyer at age 47 shouldn't be too much of an issue. In fact, anybody who is looking to borrow for their first home or a new home in their 40s doesn't need to have too much of a cause for concern as long as you meet the affordability criteria. Specifically, when it comes to looking to take out a new mortgage, there are two main factors that influence whether you are likely to be successful.

Is Size of Deposit Important for First Home Buyers?

The first of these is the size of your deposit, so yes, it is important. The size of your deposit relative to the property you are looking to buy is what's known as the loan to value ratio (LVR), and this is expressed as a percentage. So for example, if you have a £20,000 deposit for a £100,000 property, this loan to value ratio would be 80%.

Obviously, the larger deposit you have, the less risk to the bank and the more likely they are to lend you the money. You should generally aim to have a minimum of a 10% deposit, but obviously, the higher the amount you can have, the better.

What Length Mortgage Can I Get in my 40’s?

The second key area that points to whether you will be successful in obtaining a mortgage is on your serviceability, and this is effectively looking at your income as opposed to the potential expense of the mortgage repayments. And this is one of the key areas where looking for a mortgage in your 40s will be slightly different to somebody looking for a mortgage at a younger age. 

For example, many lenders will expect you to have the mortgage paid off by the time you reach retirement age. So if you are 47 and you are looking for a mortgage that takes you until age 67, you would only potentially be eligible for a 20 year mortgage term. This would increase your ongoing mortgage repayments but wouldn't mean that you would not be able to get the mortgage altogether. Some mortgage lenders are also open to extending the mortgage period past your retirement age, but they will want to see some evidence as to how you intend to support those repayments after you finish working.

How Can You Improve Your Chances of Getting a Mortgage When You're Over 40?

The first one I've already discussed and that is generating the largest deposit you possibly can. The lower your loan to value ratio, the more likely you are to get the loan, but also the better deal you can negotiate on that loan as well. Often, lower LVRs will result in lower interest rates and potentially more favourable repayment terms as well.

The second important thing you can do to improve the chances of getting a mortgage once you're over 40 is working to improve your credit score. In order to do this, you should make sure that you're always paying all your bills on time. Don't spend a lot of time, or any time, in your overdraft and don't utilise all of the credit that you have available. What this means is that you should make sure you're not using all the way up to your full credit limit each month. This could give the lender the impression that you struggle to manage your spending and need to rely on credit in order to meet your living costs. 

For example, if you have a credit card with a £5,000 limit, try to make sure you don't use more than £3,000 - £4,000 of that limit each month. When it comes to credit cards, ensuring that you don't carry an ongoing balance will also be a very positive sign for your potential new lenders. 

Lastly, another important thing you can do to improve the chance of getting a mortgage once you've over age 40 is to understand exactly what you're getting yourself into. If you’ve purchased the house before you will probably understand the process and the costs that are involved. But if it's your first time you should make sure you really have a solid level of knowledge on the process and the costs you incur when you purchase a property. The main ones to be aware of are stamp duty, if that's applicable to you, and other costs such as moving and mortgage application fees. Obviously, these fees can be significant and they can also eat into your deposit.

Can Someone in Their 40’s Get a Mortgage?

So can you get a mortgage at age 47? Put very simply, yes, you definitely can! 1,000’s of people take out their first home mortgage or refinance in their 40’s. You still have probably at least 15 to 20 years left in the workforce earning an income, in order to pay it back. Make sure you are well prepared and understand the process and the costs involved and you shouldn't have any issues getting a mortgage as long as your credit is good enough.