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Retirement mortgage calculator

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Jul 13, 2022

Retirement mortgage calculator

The retirement mortgage calculator gives you an idea of the amount you might be able to borrow on a mortgage, whether you want to buy a bungalow, flat or another property type. The retirement mortgage calculator will also calculate the amount of money you could loan against your existing home.

There are many pensioner mortgage calculators available that provide different estimates. This can be confusing, especially if your knowledge is not complete about the criteria used by mortgage lenders to determine whether you will get approved.

We can help you find the right advisor to assist with your retirement loan options. We can offer free advice about retirement interest-only mortgages and recommend the best mortgage for you.

The financial Conduct Authority regulates our advisers. This means that you will deal with highly-trained individuals who adhere to strict standards of conduct.

Use the below retirement online mortgage calculator as a guide for your monthly repayments now:

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What is a retirement mortgage calculator, and how do you use it?

Some lenders and retired customers use a pensioner mortgage calculator to determine how much their retirement mortgage will cost or how much they could borrow with another type of retirement loan. A retirement mortgage lender calculates the amount you can borrow, and the mortgage calculator will be able to give you an estimate beforehand.

These loans could be:

  • Equity release
  • Retirement mortgages
  • Refinancing
  • Retirement interest only mortgages

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Let us help in finding the right retirement interest-only mortgages

It can be hard to find a retirement calculator that fits the needs of a specific product because there are so many mortgage options available for elderly homeowners and borrowers.

It can be confusing to figure out the cost of a mortgage or the maximum amount you can borrow. Many people who have spoken to us find it easier and more efficient to speak to an advisor. We can help find you the lowest mortgage payments for a lifetime mortgage.

Talking to someone knowledgeable about retirement mortgages, retirement interest, a retirement interest-only mortgage and other retirement products, such as equity release can help you save time and help you find the right solution for your situation.

Get in touch and we will arrange for an advisor to assist you.

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How to use a retirement calculator

This is how a typical retirement mortgage calculator can guide you on which retirement lending options are available.

Repayment mortgage for retirement:

The borrower must repay both capital and interest in fixed payments over a predetermined time.

Calculates how much you can borrow, based on your income, length of the mortgage term, and interest rate

Equity Release

Equity Releases are a loan secured by your home. You can borrow a certain amount depending on how much equity your property has.

This chart shows the effect that smaller withdrawals can make on the total interest charges on the loan compared to a single lump sum withdrawal

Hybrid Equity Release

The loan interest must be paid monthly. However, you can stop paying the interest at any time. You can also add interest to your loan to make it pay off when you die or move into residential care.

It shows the total cost of the loan, if interest is paid regularly, versus not paying any.

Retirement Interest-only mortgage:

The retirement interest-only mortgage works in the same way as a regular interest-only mortgage, but it is typically only paid off when the borrower dies or moves into long-term care.

Based on the amount of equity you want to release, you can calculate the cost of the loan as well as the interest rate you will pay.

The above information gives an overview of the different types of retirement mortgage calculators. However, you should remember that not all lenders use the same sophisticated calculators.

Some calculate figures based only on your income and term length. Others factor in variables like your credit rating.

These are the reasons why results may vary from one lender to another. However, if you make an enquiry, our advisors can help you find the right lender for you. We are specialists in retirement interest-only mortgages

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How does a retirement mortgage lender determine the maximum amount I can borrow

Your lender will need to know that you can afford a repayment mortgage based on your retirement income if you apply for one.

The loan amount is generally limited to 44.5x income. However, some lenders may lend 5x your earnings or more if the circumstances are right.

Example of income to loan ratio for a borrower earning £20,000 annually

Some lenders may only offer a 50% LTV (loan-to-value) to retired borrowers.

This is because you may not be working anymore and receive a pension instead of an income.

This is why lenders consider this a greater risk that you won’t be able to pay your mortgage on time.

However, it is possible to get a mortgage for retirement. You may find specialist lenders that can help you get a mortgage depending on your situation.

Get in touch if you want to learn more about the retirement lenders most likely to approve your Mortgage Application.

Are age limits considered in mortgage calculators?

Yes. Most mortgage calculators online will use the standard mortgage for a repayment mortgage, which is typically 25 years.

Lenders tend to offer shorter terms on mortgage periods to pensioners because, for instance, someone who takes out a loan at 75 may not be around to repay it.

It is more difficult to find a lender willing to lend you a mortgage if you are older than you should be.

Keep in mind, however, that specialist lenders will accept applicants as young as 85 years old. They’ll also consider applicants as minorities as long as the lender is confident the borrower can pay the mortgage. Submit an enquiry to our advisors and we will help you locate them.

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There are no age limits on loans secured against your home

While the minimum age to get equity release loans is 55, some lenders may allow older applicants to access more capital than younger borrowers.

Older homeowners are more likely to live a shorter lifespan, lenders will increase their LTV (loan-to-value) rates.

Lenders may be less cautious in releasing large amounts of equity to younger borrowers (say 55), because the borrower is still young and could need to draw on their equity for future retirement costs, such as long-term care.

A doctor’s report is acceptable for cases where health concerns are a factor. This will provide the lender with evidence of the condition.

Due to their shorter life expectancy, some lenders might be willing to increase the LTV on homeowners who have serious health problems.

Calculator for mortgages for those with poor credit

It is possible that mortgage calculators for retiree borrowers do not consider affordability factors like poor credit.

This can lead to frustration and misinformation as lenders may have strict criteria for lending to customers with less than perfect credit scores.

Bad credit could mean:

  • Credit score low
  • Late payments
  • Mortgage arrears
  • Defaults
  • CCJs
  • Debt management plans
  • IVA
  • Bankruptcy
  • Repossession

Some lenders are more inclined to accept certain forms of bad credit depending on the severity and date of the credit.

Another factor that can confuse borrowers is the effect it has on your mortgage application.

Contact us if you have any concerns about your credit score. We can help you locate a lender and a specialist to talk to you.

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Talk to an expert about retirement interest-only mortgages & more

Many homeowners use retirement mortgage calculators in order to better understand how much they can borrow. However, these tools won’t give you an exact figure, so let a retirement mortgage lender calculate for you as they use different criteria when calculating how much they will lend.

A retirement mortgage broker’s guidance is therefore invaluable.

Based on your specific circumstances, they will be able to give you the best and most useful advice.

Contact us today if you have questions or to make an enquiry.

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