Getting a mortgage when you’re in your mid-50s can be scary. You might be wondering if lenders will give you a loan when you’re so close to retirement age. You can still get a loan for a house even after age 55, which is good news. It is possible to get a mortgage in your 50s if you plan and prepare well.
Factors That Help Older Borrowers Get Approved
Lenders care more about how well you can pay back the loan than your age. There are a few things that can help people 55 and older get approved:
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Lenders want to see a credit score of at least 620, but scores of 700 get you the best rates. To keep your score high, pay all of your bills on time and get out of debt.
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Significant down payment – Putting 20% or more down shows lenders you’re financially committed. You’ll also avoid private mortgage insurance (PMI).
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Solid income history – Having steady income from work, pensions, social security, or investments will help qualify you. Provide 2 years of tax returns.
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Large savings and assets – Big savings accounts and investment balances prove you can handle emergencies and monthly payments.
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Low debt-to-income ratio – Keep debt payments below 36% of your gross income. Pay down credit cards and loans to optimize this ratio.
You can still get a mortgage in your 50s as long as you meet the lending requirements. Your age alone won’t stop you.
Types of Mortgages Available at 55+
Many different mortgage programs can work for older borrowers:
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Conventional loans – These standard mortgages backed by Fannie Mae, Freddie Mac or private banks are available to borrowers of any age. You’ll need good credit and income.
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FHA loans – Insured by the Federal Housing Administration, these have low down payment requirements but charge mortgage insurance premiums.
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VA loans – For qualifying veterans and service members, VA loans offer 100% financing and no PMI. Credit and income still factor in.
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USDA loans – For properties in rural areas, these zero down payment loans are backed by the U.S. Dept. of Agriculture. Credit and income requirements apply.
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Reverse mortgages – Special loans that allow homeowners 62+ to access home equity. You retain ownership and there are no required payments.
Within each loan type, you can choose between fixed- and adjustable-rate mortgages depending on your needs. Shop multiple lenders to find your best fit.
How Age Impacts Mortgage Terms and Rates
While lenders focus on your qualifications more than age, your age can impact mortgage terms in a few ways:
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Shorter loan term – At 55+, consider a 15-year mortgage to pay it off before retirement. Or choose a 10-year term to get lower interest rates.
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Loan amount limits – Lenders may cap the loan amount for borrowers close to retirement age, so you aren’t stuck with big payments on a fixed income.
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Slightly higher rates – Older borrowers may pay a little more for rates, perhaps 0.25 to 0.5% higher than younger applicants with the same scores.
Even with these impacts, getting approved for a mortgage in your 50s is very feasible. Just be sure to shop around for the best loan program and terms for your situation.
Tips for Getting a Mortgage After Age 55
If you plan to apply for a mortgage in your mid-50s or later, keep these tips in mind:
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Review your credit report – Check all three bureaus for errors that could impact your score and work to correct them in advance.
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Pay down existing debts – Reduce credit card balances and other debts to improve your debt-to-income ratio before applying.
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Calculate costs carefully – Include taxes, insurance, HOA fees, maintenance and utilities to ensure you can afford the total monthly payment.
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Consider downsizing – Right-sizing to a smaller home can reduce your mortgage amount and overall housing costs.
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Have reserves available – Show lenders you have at least 3-6 months’ worth of mortgage payments in liquid savings as a backup plan.
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Check if lenders allow retirement income – Many count Social Security and pension payments to qualify you, but check first.
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Be prepared to make a larger down payment – Putting 20-30% down shows lenders you’re financially ready to take on a mortgage in your 50s.
With prudent preparation, borrowing at 55+ is very possible. Connect with lenders early to discuss your options and get pre-approved before you begin house hunting.
Alternatives if You Can’t Get Approved for a Mortgage After 55
If you don’t qualify for a traditional mortgage later in life, there are still options to consider:
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Take on a co-borrower – Adding a younger co-borrower, like an adult child, can help you get approved by supplementing your income.
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Explore government programs – State and local programs exist to help seniors and low-income buyers purchase homes. Look into options in your area.
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Try a community land trust – Some nonprofits develop affordable homes and help buyers with financing. They retain ownership of the land to reduce costs.
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Rent or live with family – Less ideal, but renting or living with relatives are alternatives to buying if you can’t get a mortgage now.
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Delay your purchase – You can continue renting and save up for a larger down payment to improve your chances of approval later.
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Lease-to-own – Some sellers will lease a home to you now with the option to purchase later once you’ve improved your financial qualifications.
While getting a mortgage after 55 comes with some challenges, it is definitely possible in most cases. With prudent financial planning and preparation, you can set yourself up for success. Shop multiple lenders, evaluate all your options, and work to put your best financial foot forward.
The Bottom Line
Yes, you can absolutely get approved for a mortgage at 55 years old and beyond. Focus on improving your credit, reducing debts, and boosting your down payment funds. With some planning and effort, you can obtain the right financing to become a homeowner later in life. Don’t let your age stop you!
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Fear & Greed Index
Moving somewhere new when you retire isn’t uncommon. But deciding whether to take out a new mortgage to buy a home is a big deal.
Much of your financial life is changing as you transition from a steady paycheck to a mix of fixed and variable income and a new lifestyle. So adding a large debt to the picture isn’t an easy call.
That’s especially true now that mortgage rates hover around 7% and home prices keep rising. “Any time you take on debt, you increase risk in your situation,” said Illinois-based certified financial planner Jim Stork.
More than a third (35%) of homebuyers last year were between the ages of 59 and 98, according to data from the National Association of Realtors. Within that group, a majority financed their purchases.
Whether taking out a new mortgage makes sense for you depends on a lot of factors, including how to prove to a lender that you’re a good credit risk, plus your feelings about the debt and the ongoing cost of maintaining a home.
To get a mortgage, your age won’t be a factor, but your income will be
If you’re concerned that you may be less attractive to a mortgage banker because you’ve hit retirement age, know that it is illegal to discriminate against anyone applying for a mortgage based on their age.
Lenders’ chief focus will be on your ability to repay your mortgage with your various sources of non-paycheck income.
“When you qualify for a mortgage, it’s all based on your income,” said Melissa Cohn, regional vice president at William Raveis Mortgage.
That, and of course any debt you have that will soak up your income, but we’ll get to that in a minute.
The income sources that lenders consider, absent a regular paycheck, include: Social Security benefits, pension or annuity income, spousal benefits, disability payments, interest and dividends and your 401(k) or IRA.
If a portion of your income is not subject to tax, the lender may treat it as worth 25% more. Fannie Mae offers this example: Say 15% of a $1,500 monthly Social Security benefit is tax free. That means $225 of it will not be subject to tax ($1,500 x 15%). And 25% of that amount comes to $56 ($225 x 25%). So that $56 can be added to a person’s qualifying Social Security income amount ($1,500 + $56 = $1,556).
If you want to use your nest egg, different methods can be used to calculate how much income it would provide. There is the asset depletion method in which your eligible assets are divided by your loan term. In the case of a 30-year mortgage, that would be 360 months. If your IRA is worth $700,000, that translates into $1,944 per month ($700,000/360). “You don’t ever have to take the money out — but you can use your assets [to qualify for a mortgage] as if you were going to take the distribution,” Cohn said.
Another option: If you are at least 59-1/2, you can start taking monthly distributions from an IRA without penalty — or a 401(k) if your plan rules permit — and the lender will count that as income so long as you show that you have sufficient funds in the account to keep taking that same monthly distribution for three years. Once you close on your home, Cohn said, you can reduce or stop taking distributions if you choose. That assumes you are not yet in your 70s when the IRS requires you to start taking minimum distributions, said Mark Luscombe, a principal analyst at Wolters, Kluwer Tax & Accounting.
Lenders will also assess your debt-to-income ratio, because no matter how much income you have, the big question is how much of it will be consumed by your debts.
The debt portion is composed of your expected mortgage payment plus any credit card, student loan, car loan or other outstanding debt you may have. Generally speaking, for conventional loans your DTI ratio can be up to 50%, Cohen said. That ratio falls to between 43% and 45% if you’re taking out a jumbo loan, she added. A jumbo loan exceeds the conforming loan limits in the area you want to buy.
But ideally your debt level will fall well below these top limits, both for the lender’s sake and yours.
And, of course, the higher your credit score, the better the interest rate you can get on a mortgage.
Can I Get a 25 Year Mortgage at Age 55?
FAQ
Is it wise to buy a house at 55 years old?
If you’re in your 50s, it’s not too late to buy a new home, but it’s key to ask the right questions and make the wisest decisions possible. Above all, avoid getting stuck making mortgage payments years into your retirement. National Center for Health Statistics.
Can a 54 year old get a 25 year mortgage?
Is it still possible to get a 25-year mortgage if you’re over 55? Yes! As people live longer and work later, many mortgage lenders are giving older borrowers more options.
What is the oldest age you can get a mortgage?
Many lenders impose an age cap at 65 – 70, but will allow the mortgage to continue into retirement if affordability is sufficient. Mar 19, 2025.