Age limit for a mortgage loan: is it true?

Are home loans only available to young people in their twenties and thirties? Or can you still get a loan from the bank at a more mature age? As far as we are concerned, life has some treats in store for every generation. In this blog, we will check out for you whether there is indeed an age limit for mortgage loans.

What major changes are you still planning for your home?

Wisdom comes with years – or so they say – and we can confirm that when it comes to home life. Over the years, you have not only gained loads of life experience, but your personal capital has also grown nicely.

In other words, you may have a nice little savings account to reinvest. And you were thinking about real estate, right? Or maybe you just want to move? There are several reasons why you may start thinking about a mortgage loan again:

• Your children have left the family home and you want to move into a smaller home or apartment
• Your heart has fallen for a (sunny) foreign country and you want to invest in a second home
• You want to buy property with a view to letting

Whatever the reason, real estate is and will remain a very sensible investment choice. Only: do you have to deal with additional terms and conditions from the bank as soon as your birthday cake has more candles?

The good news first

In Belgium, there is no such thing as a legal age limit for taking out a mortgage loan. In theory, this means that you can take out a loan at any age. When you are 55, 65 or 75 years young.

In Belgium, there is no such thing as a legal age limit for taking out a mortgage loan. Nevertheless, this is not carte blanche for you once you have a few more candles on the cake.

But now the practice

In practice, however, your age is indeed a factor that will be taken into consideration. You must be able to guarantee the repayment of your loan. Once your retirement is just round the corner, your bank will also want to build in extra security. After your retirement, you will likely drop to a lower level of monthly income.

What does the bank’s policy say?

Of course, your statutory pension is not the only form of income. You may have built up solid capital in other ways. These are also factors that the bank will take into account.

Irrespective of this, you are still subject to the policy of the bank in question. To what extent do the following factors matter to them?

• ... the average remaining lifetime for a man or woman
• ... your health and the possibility of taking out outstanding balance insurance.
• ... the financial status of your partner, if any
• ... any debts from the past
• ... can you offer anything as collateral, such as other properties?

Other factors may act in your favour. As we said above, the more financial guarantees you can give the bank, the lower the risk for them. For example, you can opt for a shorter repayment period if you have the required funds. Or you can throw the potential returns on your investment property into the pot.

Are amended conditions possible? Test the water with your bank

So, although there is theoretically no age limit for mortgage loans, you can now see that you will have to line up all your options on the table.

For example, certain banks may be willing to make an extra effort for you, although they may charge higher interest rates in return. Or perhaps request life insurance or other guarantees.

So look very carefully at the details when weighing up different proposals.

Conclusion: be prepared for a risk analysis

In summary, as an older applicant for a mortgage loan, it is best to be prepared for an extra round of questions from your bank. Please also take into account that each bank has its own internal rules, and that proposal A may be structured completely differently to proposal B or C.

As with taking out a home loan at a younger age, it is therefore important to ask very detailed questions yourself, and to call on experts in this area where necessary.

Only then can you be sure that you have done everything you can to take out an attractive and, above all, feasible home loan. So that you can relax and enjoy your new home in total comfort, whether it’s under a tropical sun overseas, or ours at home.

Keyhome simulates your home loan

Keytrade Bank is the right place for you to take out an attractive customised mortgage loan. Curious to know how we translate this into actual figures for you? Run the simulation via Keyhome now, and discover what is possible for you.

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