mortgage after retirement age?

M

maryburry

Registered User
Messages
14
I want to know if there is a rule with all banks that you have to have your mortgage payed by retirement age - 65? Is it an individual bank rule or a central bank rule? Are there banks who will take people with mortgages that go beyond that age by two or three years.?
 
When granting a mortgage, the banks, and the Central Bank require that it be paid off by age 65 or 70.

If an existing mortgage is in arrears, the lender can reschedule it beyond age 65, but only in exceptional circumstances.

And, of course, when you reach 70, some lenders were happy to offer mortgage-free home owners, interest roll up life loans.

Brendan
 
All banks have a maximum age when calculating the term you can have your mortgage over. It is 65 for most. PTSB has a maximum age of 70.

Why would you want a mortgage after retirement age anyway? It is one of the biggest mistakes that I have seen from retirees who took out mortgages in the Celtic Tiger. Income reduced significantly, the debt doesn't, so it ends up taking up a very large proportion of their income.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
I would agree here.

As someone who is currently reviewing my pension contributions, the pension contribution required to support the extra mortgage payments would be better off paid against the mortgage to avoid the compounding of the interest.

Unless of course you are on a public sector/defined benefit pension with no option on what you contribute. If that is the case, you should consider trying to do a deal which sees the remaining balance on the mortgage come from your lump sum.

As someone above has commented - the rule is bank specific and some banks are better than others. I assume the level will move towards 68 generally given it will be the new official retirement age !
 
SBarrett said:
Why would you want a mortgage after retirement age anyway? It is one of the biggest mistakes that I have seen from retirees who took out mortgages in the Celtic Tiger. Income reduced significantly, the debt doesn't, so it ends up taking up a very large proportion of their income.
Click to expand...

The fact that many people made stupid mistakes during the Celtic Tiger should not be used to write off a very useful mortgage product.

I come across many people in their 50s, who have a mortgage of €100k on a house worth €300k. They will not have the capital paid off by age 65, so the lenders are classifying them as unsustainable. This is absolute nonsense. If a mortgage is unsustainable, the alternative of renting is far worse.

Now turn that around. let's say a 55 year old renter with €200k cash wants to live in a house worth €300k. The bank should be delighted to give him an interest only mortgage for €100k if he can comfortably afford the monthly interest or €250.
 
gnf_ireland said:
the pension contribution required to support the extra mortgage payments would be better off paid against the mortgage to avoid the compounding of the interest.
Click to expand...

Don't forget that the pension fund will be compounding as well!

I agree that younger people should save for a deposit and pay down their mortgage to a comfortable level before contributing to a pension. But it's less clear as they get older. For example,within a few years of retirement, it can be very tax efficient and the lump-sum on retirement can be used to pay down the capital on the mortgage.

Brendan
 
Brendan Burgess said:
For example,within a few years of retirement, it can be very tax efficient and the lump-sum on retirement can be used to pay down the capital on the mortgage.
Click to expand...
Agree completely here

But lets say someone who is 40-45 bracket - so in reality 20-25 years from retirement for most people given the way things are going. Much trickier decision to make, especially when given the uncertainty of what the pension structures will exist in say 20 years time !
 
Brendan Burgess said:
The fact that many people made stupid mistakes during the Celtic Tiger should not be used to write off a very useful mortgage product.

I come across many people in their 50s, who have a mortgage of €100k on a house worth €300k. They will not have the capital paid off by age 65, so the lenders are classifying them as unsustainable. This is absolute nonsense. If a mortgage is unsustainable, the alternative of renting is far worse.

Now turn that around. let's say a 55 year old renter with €200k cash wants to live in a house worth €300k. The bank should be delighted to give him an interest only mortgage for €100k if he can comfortably afford the monthly interest or €250.
Click to expand...

Are the bank classifying them as unsustainable a 5 -10 years before they reach retirement age? Have they missed payments?


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
As I understand it, Ulster Bank will go to 70 if you're a member of a pension scheme.

To be fair, used sensibly the tax free lump sum and the pension could have a role to play in sensible wealth planning in respect of one's mortgage.

However, in reality many people look for the maximum term to keep the initial repayments low, but then clear the mortgage much earlier.
 
The reason I ask is I'd like to switch mortgage. But the bank I tried to switch to wouldn't consider me as my mortgage goes past 65 by a few years. I offered my lump sum to pay what's left to no avail. They said it was unlikely I d get any bank. The only way I'd be taken was if I paid a substantial lump sum.
 
Your best approach is to post all the figures here and someone might come up with a suggestion for you.

Brendan
 
You must log in or register to reply here.
Back
Top