Purchasing your own home is one of the most important tasks for a person in the modern world. Unfortunately, for many, due to fairly high real estate prices, it remains unsolvable. However, mortgage lending can help if there is a lack of funds to pay the cost of an apartment, house or plot.
This problem can affect not only young people, but also fairly mature people. When a potential borrower is old enough, banks perceive this as a serious risk of non-repayment of the loan. We suggest you find out up to what age various credit institutions provide mortgages for housing, and what requirements they impose on borrowers.
General lending conditions
General lending conditions include the most common requirements imposed by banking organizations.
For borrowers this is:
- age;
- experience;
- earnings;
- good credit history.
Housing, as a rule, is considered from the point of view of its suitability for use, that is, its dilapidation, planned demolition, and non-compliance with sanitary standards are excluded.
Borrower age and conditions
Compliance with age restrictions by future loan borrowers is the most important indicator for the bank, which is considered first.
Minimum indicator
According to the law, a person who has the opportunity to take out any type of loan from a financial institution (including a mortgage) is recognized as a citizen who has reached the age of majority - 18 years. But it is worth considering that banks prefer older clients, justifying this by reducing the risks for the lenders themselves. Therefore, when answering the question at what age can you take out a mortgage, managers of many financial institutions indicate the age of 21 years.
Maximum
The maximum age is considered to be that the borrower reaches 75 years of age at the end of the loan obligations. However, some banks set the threshold at 65 years old - by this age the client must repay the loan in full.
The fact is that a mortgage loan is issued for a period of no more than 30 years. The older the borrower, the shorter the lending period and the smaller the amount the bank will offer.
What factors influence
Age indicators vary according to the factors that the bank relies on when concluding a loan agreement.
These factors include:
- Financial position. The approaching retirement age threatens, possibly, the loss of a job.
- Client's health. The risk of disability increases.
- Increase in natural mortality after 60 years.
Until what age are they given mortgages to retired people?
The age requirement directly depends on the internal policies of the financial institution. On average, banks are ready to cooperate with clients who are under 65-75 years of age at the time of debt closure. This means that, before the age limit, the borrower must repay the mortgage loan. Having received the application, the bank evaluates the potential client. If it turns out that the maximum age will be exceeded at the time of commitment, the pensioner's application for a mortgage may be rejected.
For your information
Let's say the borrower wants to take out a mortgage for 10 years. The bank has established requirements for the age limit - the figure is 75 years. This means that you must apply to the organization before you reach 65 years of age. If a pensioner’s application is submitted later than the required age, it will not be considered.
Reasons for restrictions
These age restrictions are established in order to reduce risks and increase favorable conditions for purchasing a loan, both for the banking organization and for the borrowers themselves. The list of reasons for restrictions is quite small, but it affects all points of loan obligations.
Creditor risks
The first reason is the risks of the creditors themselves, which are associated with the loss of the issued loan, and, consequently, a significant amount of money.
Most mortgage loans are issued with the conclusion of an agreement on life and health insurance of the loan borrower. Although this condition is not mandatory, failure to comply with it may subsequently increase the interest rate on the loan or even lead to a refusal to provide the loan. Accordingly, the older the client, the greater the risk of the insurance company refusing to conclude a contract.
What is not beneficial for borrowers
The second reason is the lack of benefits for borrowers. When concluding an agreement with a bank, the client expects to receive funds, which he subsequently undertakes to pay properly with the payment of all interest on it. Lenders are screening older clients with increased scrutiny and are trying to attract more guarantors.
Secured by real estate
Securing a mortgage secured by existing or purchased real estate is issued to reduce the risks of a financial institution associated with possible non-payment of the loan. This measure allows you to defer the age limit for borrowers.
The mortgaged apartment becomes the full property of the debtor after full repayment of the loan. If the borrower systematically fails to comply with the requirements specified in the agreement to pay monthly payments and pay the corresponding interest, the lender has the right to convert the pledged property into the ownership of the bank.
Average temperature in the hospital
So, banks generally approve mortgages for people aged 18–60 years – this is the average age up to which they give a mortgage for a home. The bank will have its own separate requirements for each specific loan applicant due to the above reasons.
Of course, the main influence here will be the risk of death, the level of income (young people earn little, pensioners receive only a pension) and the borrower’s belonging to one or another social group, which determines the first two factors.
What social groups can be identified in connection with the question posed:
- spouses
- young families
- pensioners
- beneficiaries
Spouses
It is most often and easiest for people who are officially married to get a mortgage. It is they who have the highest need to expand their living space, and it is they who are most willing to give it to them, because if two people bring income to the family, then their total budget will be larger, and, accordingly, the chance of getting a mortgage is higher (they will simply be able to pull).
But families are different. There are families where there are beneficiaries, where there are military pensioners, where there are government employees - and all this affects the age limit for obtaining a mortgage loan.
That is, what is important here:
- Family people have a higher total income
- in families there are persons belonging to different preferential groups of citizens
Banks approve mortgage loans for ordinary, standard families from 18 to 60 years of age. But the borrower must be 60 years old at the time of loan repayment. Thus, the age limit for receipt is 30-40 years.
Young family
Over the past few years, a product such as mortgages for young families has become popular in the banking industry. Many banks have mortgage loans with this name, for example, Sberbank, and, of course, VTB24.
Let us remind you once again that this name is just a publicity stunt. It is connected with the fact that Russian President Vladimir Putin has been fighting the fertility crisis for 16 years and “stimulating” its growth. In fact, of course, nothing happens, but the association with improving the lives of “young families” is still on everyone’s lips.
It is not known how much better their lives have become, but the country’s main banks are actively speculating on this topic.
The main difference between a mortgage “For young families” and a regular one is the reduced interest rate and the borrower age limit of 35 years.
Mortgages for young families are issued up to 35 years of age!
However, it is worth noting that 35 years is the age limit for most types of conventional mortgages.
For pensioners
If we analyze the situation with age limits for all categories of citizens, it turns out, whatever one may say, at the time of loan repayment a person should be no more than 75 years old. And it doesn't matter who you are. 75 years is a record maximum provided by individual banks.
We should also not forget about the play on words - in our country a pensioner is considered to be a military man who retired at the age of 35, as well as an astronaut and an EMERCOM nickname. Yes, they are pensioners, but they are in fact young people. Therefore, we can safely say about them that banks give mortgages to pensioners.
In fact, there is no mortgage for pensioners in Russia - issuing a mortgage to a 60-year-old person, and even for 30 years, is a huge risk for the bank not to return its funds. Therefore, a “pensioner” must be the same 25-40 years old as a regular borrower.
In all other cases, the result is the following parsley - the permissible age in 2020 in Russia, when a person is allowed to retire, is 60 years for men and 55 years for women, so if a man retired, but still had sufficient income to obtain a mortgage, then they can give it to him only for 15 years (until he reaches the age of 75 years), to a woman for 20 years.
Is the math clear?
And if you are approved for a loan from a bank where the limit is set at 60 years, then you need to take out a mortgage for such a period in order to have time to pay it off when you reach this age. And whether you are a pensioner at the moment or not is your problem.
State program requirements
State programs provide favorable conditions for obtaining loans by different categories of citizens.
Such citizens include:
- young families;
- military personnel;
- large families;
- the poor;
- teachers, doctors, government workers.
A young family is defined as spouses, at least one of whom is under 35 years of age. For military personnel, the amount owed on the loan must be repaid in full before age 45. Other programs generally set the age limit at 35 years.
The exception is medical workers. For them, the maximum limit is 50 full years.
Loan after 40
Providing a mortgage loan after 40 years goes beyond the age that is considered ideal for obtaining a loan (30-35 years), since the bank focuses on when the debt will be repaid in full, that is, in how many years the borrower will pay off the financial institution. However, almost all credit institutions determine their individual approach to each client.
Spouses
Borrowers who are in family relationships and do not have young children are considered the most suitable for the bank. This is due to the fact that the total family income is higher, and accordingly, the risk of non-payment of the loan is reduced.
Loan to pensioners
For citizens of retirement age, as practice shows, a loan is issued upon attracting a sufficient number of guarantors. Such persons may be children, grandchildren and other relatives who are ready to act as a guarantor. In this case, a mandatory requirement is that the borrower has close relatives, to whom, in the event of the death of the debtor, the obligation to pay his mortgage debt will pass.
Are there any benefits
Benefits may be provided to military retirees. They, on the basis of Federal Law No. 76-FZ of May 27, 1998, which secures their special status, are provided with a number of targeted programs when obtaining a mortgage.
For example, if you have at least 10 years of experience, you are entitled to monthly payments—subsidies that will help you pay off your mortgage payments. In addition, military pensioners can use the funds that are stored in the account of these persons under the military housing system if their living conditions improve.
Until what age are pensioners given a mortgage if there is a co-borrower?
The co-borrower in a mortgage bears the same responsibility as the recipient of the loan. Therefore, the person must meet the standard requirements. The bank carefully checks mortgage applicants. If the co-borrower is younger than the recipient of the funds, this will not allow the age limit to be shifted. The assessment will be based on the parameters of the main applicant.
When a co-borrower is older, this can negatively impact the likelihood of your mortgage application being approved. To remedy the situation, you can provide the bank with additional collateral. Company loyalty will also increase if a person attracts additional co-borrowers.
Conditions of Russian banks
The conditions that banks set for borrowers consist of both generally accepted rules and the personal preferences of specific financial institutions.
Sberbank
The leading bank in the home lending industry provides loans until customers reach 75 years of age upon completion of repayments. But the borrower must work or have sufficient income. If such conditions are not met, the age limit is reduced to 65 years.
The minimum interest rate at which it is possible to obtain a mortgage loan is 8.6% per annum for a period of up to 30 years. In this case, the down payment must be at least 10% of the total real estate valuation.
Tinkoff
This credit institution is widely known and enjoys great popularity among the population. So until how many years can you take out a mortgage from this bank? The age limit is 75 years. The pensioner is required to provide a certificate of income, namely the amount of the pension received at the Pension Fund office.
The bank recognizes a minimum rate of 6% for apartments in new buildings, with the possibility of loan repayment from 12 to 300 months.
VTB
This bank lends to people aged 21 to 65 years and provides various profitable mortgage programs. VTB agrees on all conditions for purchasing a loan on an individual basis. The organization takes into account the income received by future clients in the aggregate (work, pension, other payments).
The interest rate is from 9.1%, and the maximum period for fulfilling obligations is 30 years.
Rosselkhozbank
Like most financial organizations, Rosselkhozbank provides mortgage loans to citizens up to the age of 65 at the time of full repayment of the debt. Active work with pensioners who want to take out a mortgage in this institution also provides preferential conditions for pensioners, which, if the appropriate conditions are met, involve increasing the age limit to 75 years.
Additional terms
To find out how many years a mortgage on an apartment lasts, you need to contact the nearest branch of the selected bank. But before that, it is important to learn about additional factors influencing the decision of a credit institution. If the loan is issued by spouses, then banks establish the following conditions:
- The client age limit is raised to 40 years.
- If we are talking about a young family, when one of the spouses is under 35 years old.
If a whole family is applying for a loan, then banks usually pay attention to the age of the youngest working family members. Provided that they have a promising job. Until what age are military mortgages available? Despite the fact that the money is paid at the expense of the state, the age of the serviceman at the time of repayment of the debt cannot exceed 45 years.
Nuances of determining the age limit
The conditions for mortgage lending to young people differ from the conditions for obtaining a loan by older borrowers.
Such nuances include:
- As a rule, the loan term is no more than 15 years;
- the minimum down payment usually increases to 20-25%;
- high cost of the borrower's insurance policy.
In this regard, when drawing up a mortgage agreement, it is important for persons of pre-retirement and retirement age to carefully consider all the conditions, possibilities and other aspects of obtaining a mortgage loan.
