How to get a mortgage if you’re a pensioner and retired

It is possible to get a mortgage as a pensioner - read our guide to find out how.

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Even though some lenders view pensioners as being high-risk borrowers, there are still lenders willing to offer mortgages to individuals receiving a pension. Read on to find out more about the options available.

Considerations when applying for a mortgage on a pension

Pensioners applying for mortgages must keep in mind that their income and financial position might limit their success in getting a mortgage. This is mainly because a pension income is usually lower than the typical income level required. If you have assets and believe you can meet lending requirements, it’s a good idea to discuss your position in person with your financial provider or mortgage broker, as applying online may be difficult if you can’t demonstrate your capacity to repay the loan.

What types of mortgage might be available to pensioners?

  • Lifetime mortgage. A lifetime mortgage is a form of equity release that you are eligible for once you’re 55. Essentially, it’s a mortgage secured on your property provided it is your main residence, while retaining ownership. You can choose to earmark some of the value of your property as an inheritance for your family. The loan amount and any accrued interest is paid back when you die or when you move into long-term care.
  • Home reversion. This is also a form of equity release, except that in this case you sell part or all of your house to a home reversion provider in return for a lump sum or regular instalments. A home reversion allows you to continue living in the property until you die, rent free, on the condition that you keep up maintenance and insure it. You can earmark a percentage of your property for later use, possibly for inheritance. The percentage you retain will always remain the same regardless of the change in property values, unless you decide to take further cash releases. At the end of the plan your property is sold and the sale proceeds are distributed according to the remaining percentage of ownership.
  • Retirement interest-only mortgage. These are similar to standard interest-only mortgages, except that the loan is usually only repaid when you die, move into long-term care or sell the house. To be eligible for this kind of mortgage, you only have to prove that you can afford the monthly interest repayments, and while there’s no minimum age requirement, these are generally aimed at older borrowers, who might find them easier to qualify for than a typical interest-only mortgage.
  • Home Ownership for People with Long-Term Disabilities (HOLD). This scheme applies if you have a long-term disability. You can only apply for HOLD if the properties available through the other home ownership schemes don’t meet your needs; for example, you need a ground-floor property so you don’t have to climb stairs.
  • Older People’s Shared Ownership. If you’re aged 55 or older, you can get help from a home ownership scheme tailored to older people. It works in the same way as the general shared ownership scheme, but you can only buy up to 75% of your home. Once you own 75%, you won’t have to pay rent on the remaining share.

How to compare mortgages

  • Interest rates. Interest rates are one of the most important elements to compare as interest is the biggest expense for mortgages. For pensioners, it’s important to look for the lowest interest rate because this is what will help you save money.
  • Mortgage flexibility. It’s important for your mortgage to provide you with flexibility. This may be flexibility in repayment schedules or in making additional repayments. Compare each loan and see what flexibility it can offer you.
  • Eligibility requirements. Some mortgages will require you to meet certain eligibilities in order to take out that mortgage. This may include a regular source of income, a good credit history and more. Pensioners in particular should compare the eligibility requirements of mortgages because some may be more appropriate to apply for than others.
  • Fees and charges. Most mortgages have mandatory fees and charges that you may have to pay. Compare any potential fees and charges each loan has (these may be either up-front fees or ongoing fees) and select an option with lower fees to help save money.
  • Loan term. Each mortgage provided by lenders will have different loan lengths. Compare and select the mortgage that provides you with the loan length to meet your needs.

Am I eligible for a mortgage if I’m on a disability benefit?

    Disability benefits are considered a valid form of income by most lenders. Therefore a mortgage application for someone on disability benefits is not treated any differently from an application where someone services their loan with other forms of income.

    As with any applicant for a mortgage, the lender will review whether the amount of benefit you receive is sufficient for you to comfortably repay the loan.

    Most lenders will review your application on a case-by-case basis. Your eligibility for a mortgage will depend on the amount of income you receive and how much of this can be used to service a loan.

    Other factors including your age, assets and debts will be assessed by a lender on an individual basis.

    Each lender will have different eligibility criteria, so it’s best to speak directly with your mortgage broker or lender to determine whether a mortgage is suitable for you.

Extra documentation for disability pensioners

Among other eligibility criteria required by the lender, you’ll generally need to provide the following:

  • Evidence of funds to complete the deposit
  • Bank statements showing benefits being paid into your bank account

Am I eligible for a mortgage on an Armed Forces Pension?

Many lenders may accept an Armed Forces Pension as a source of income for a mortgage. In order to demonstrate your pension as a source of income for a mortgage application, you’ll need either a current bank statement showing your pension payment or a current Veterans Advisory and Pensions Committees statement.

Pros and cons of mortgages available to pensioners


  • Gives you funds when you need them. These mortgages allow pensioners to enter the property market and give you the funds you need, when you need them.
  • Extra benefits. Some mortgages available to pensioners come with extra benefits such as low or no interest rates, flexible payment plans and advance payments.


  • Higher interest rate. Equity release mortgages tend to have higher interest rates compared to other mortgages.
  • Eligibilities. Some mortgages have specific eligibility requirements you must meet that may be quite stringent.

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