“Age Limits and Repayment Terms: Understanding Mortgage Loans for Elderly Borrowers”

The granting of a mortgage loan, and the conditions under which it is made, will depend on several factors related mainly to the economic situation of the customer: his income, his level of solvency, and whether or not he has debts. . There is another circumstance that is key: the age of the borrower, which will determine both the repayment term and the interest on the loan.

But is there a maximum age to apply for a mortgage? Not legally, but all banks set a limit, the result of adding the age of the youngest applicant – when there are several and they have different ages – and the repayment period.

This limit “is generally between 70 and 75 years. In some situations it can reach 80, but this is exceptional, “explains Leyre Pérez, analyst at the Spanish Mortgage Association (AHE). This means that when the last installment of the loan is paid, the user cannot exceed the age set by each financial institution.

Generally, the repayment period is usually limited to 30 years, so it is normal for the client to be 40 or 45 years old at the time of the mortgage application. However, it is possible to obtain a mortgage over 60 years, even if the repayment period will be shorter in this case – 15 years, or 20 years exceptionally – and the conditions will be harsher.

Not so much because of the interest rate set for the loan, but because “they have to pay it back in a shorter period of time than the younger ones and the monthly payments will be higher”, explains Miquel Riera, HelpMyCash mortgage expert.

“For example, if a 55-year-old person applies for a mortgage loan from a bank which authorizes a maximum definitive age of 75 years, he will be obliged to choose a repayment period of up to 20 years at most, for lack of which the entity will not have to approve their loan application,” adds Riera.

As for the rest of the conditions, such as the interest rate or the maximum amount to be loaned, “they will depend on the client’s profile: the better, the better, as is the case with young candidates”. says the expert of the financial comparator. .

life insurance

In any case, as they explain on the Bankinter website, in the case of older applicants, “banks can usually require life insurance. It is also possible to minimize the risk thanks to the endorsement of a younger person justifying a certain level of income.

Each financial institution has its own policy regarding the maximum number of years that the applicant’s age and the repayment term must add up. BBVA, for example, sets this limit at 70 years. The borrower “can request a maximum repayment period of 30 years, but the sum of the age of the youngest holder with income and the duration cannot exceed 70 years. Therefore, if the youngest holder is 50 years old, he may request a maximum duration of 20 years, ”specifies the entity.

In Santander, the maximum repayment period is 30 years, but it allows customers up to 50 years old to apply for mortgages, since the sum of the two figures cannot exceed 80 years. At CaixaBank and Kutxabank, the limit is 75 years.

However, not all of them are disadvantages for elderly clients, as in many cases they benefit from a fixed monthly pension which provides them with some financial stability.

“If in addition to the public pension there are private pension plans or the rental of accommodation for which the applicant receives additional income, the situation will be even more favorable”, they explain at Bankinter.

In any case, it is advisable to follow the recommendations of the Bank of Spain when applying for a mortgage loan: do not exceed 30 years as the maximum repayment period – although in reality few allow it – and that in no case more than 35% of the monthly income to pay the mortgage.