Mortgages for retirees and older adults

While the Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating against credit applications based on factors such as age, qualifying for a mortgage may be more difficult later in life. In fact, the likelihood of a mortgage refinance application being rejected rises steadily with age, according to research from the Federal Reserve Bank of Philadelphia.

Still, baby boomers — born between 1946 and 1964 — accounted for 42% of recent buyers, more than any other generation, according to the National Association of Realtors’ 2026 Home Buyers and Sellers Generational Trends report. If you’re looking to buy a home, refinance or borrow against equity as an older adult, it’s important to assess your credit and finances early in the process to avoid rejection and make the most out of your home loan, regardless of your age.

Key statistics on older adults and mortgages

• Baby boomers made up 55% of home sellers. This is the largest share of any generation. (National Association of Realtors, 2026 Home Buyers and Sellers Generational Trends)
• Older adults are the most likely to own a home. In 2025, 84% of those 65 and older and 82% of those ages 55 to 64 owned their home, compared with 63% of all adults. (Federal Reserve, Economic Well-Being of U.S. Households in 2025)
• Baby boomers with a mortgage owed $197,090 on average. This is as of September 2025, compared with $260,860 for all borrowers. (Experian, Average American Debt by Age)
• Older heads of household have higher net worths. Families headed by a person 75 or older had a median net worth of nearly $505,000 in 2025 — the highest of any age group in the survey. (Federal Reserve, Changes in U.S. Family Finances from 2022 to 2025)

Should you get a mortgage in retirement?

Taking on debt in retirement deserves careful consideration, since your income may be lower and less flexible than it was during your working years. A mortgage payment that was manageable with a steady paycheck can strain a fixed income, especially if you need to pull from retirement savings to handle it. Withdrawals from a tax-deferred account like a traditional IRA or 401(k) are taxed as income, so covering a mortgage payment with them can cost more than the payment itself.

Be sure to consider your spouse or partner when deciding to get a mortgage or borrow against your home. If one of you were to die during the loan term, would the survivor be able to repay the loan? Take into account life insurance and other financial support the surviving spouse can count on.

However, you may be in a position to take on a mortgage or other home-related debt if:

• You’re still working and expect to continue earning at your current level or higher for long enough to make a substantial dent in your mortgage balance.
• You’re retired, but you can afford a substantial down payment and, ideally, a 15-year mortgage. Your monthly payment will be higher than with a 30-year mortgage, but your interest rate will likely be lower.

Keep in mind that, while your monthly payment may be fixed, the costs of insurance, property taxes and utilities, as well as routine maintenance, are likely to increase, which will take an extra bite out of your retirement savings.

Is qualifying for a mortgage harder for older adults?

Despite laws prohibiting age discrimination in lending, older people can face more challenges in getting approved and receiving a competitive price. Research from the Federal Reserve Bank of Philadelphia found the rejection rate for mortgage applications rises steadily as people age, and it climbs faster among the oldest applicants, even when accounting for credit and income characteristics.

Getting approved doesn’t always result in a good deal, either. In 2025, 81% of refinancers age 55 and older paid more than they needed to for their loan, according to a Bankrate analysis of federal mortgage data.

Some factors can work against older borrowers:

• Lower or fixed income: 74% of those 60 and older receive Social Security, and 49% receive a pension, according to the Fed’s Economic Well-Being survey. Both are sources of qualifying income for retirees, but smaller incomes can push up debt-to-income (DTI) ratios, which is measured by lenders when deciding how much you can borrow.
• Home condition: Older applicants are more likely to be denied a loan due to insufficient collateral, according to the Philadelphia Fed research. Lenders may have issues with problems like deferred maintenance, which can lower a home’s appraised value and harm your odds of approval.

You can take steps to improve your chances of being approved for a competitive rate. Paying down debt, documenting all sources of retirement income and comparing loan estimates from at least three lenders can all increase your odds. If a lender denies you without providing a clear financial reason, ask for its explanation in writing. You’re entitled to this under federal law, and you can file a complaint with the Consumer Financial Protection Bureau (CFPB) if you suspect age discrimination.

Can you get a mortgage with only Social Security?

Yes. Social Security payments count as qualifying income, so it’s possible to get a mortgage even if they’re your only income — as long as you meet the lender’s credit, debt and down payment requirements. Like any borrower with a low income, you might not qualify for a large mortgage, and you may need to put down a sizable down payment or apply with a co-borrower.

Mortgage options for older borrowers

Older adults and retirees have the same mortgage choices as any borrower, plus one senior-only option — reverse mortgages.

Conventional loan

• Who it fits: Borrowers with solid credit and steady, documented income
• Who should avoid: Borrowers with low credit scores or a high DTI ratio

You can find conventional mortgages from virtually every type of lender. Rates are based on your financial profile and the current market, and terms generally range from eight to 30 years.  If you’re making a down payment of less than 20%, you’ll need to pay private mortgage insurance (PMI).

FHA, VA and USDA loans

• Who it fits: Borrowers with lower scores or smaller down payments (FHA); veterans and eligible spouses (VA); buyers in eligible rural areas (USDA)
• Who should avoid: Borrowers who qualify for a conventional loan with 20% down, which avoids mortgage insurance

These government-insured loans might be easier to qualify for than a conventional mortgage. However, you can only get a VA loan if you or your spouse has served in the military, and a USDA loan is only available if you’re buying in a USDA-approved area.

Rate-and-term refinance

• Who it fits: Homeowners who can get a meaningfully lower rate and will stay long enough to recoup closing costs
• Who should avoid: Homeowners close to payoff, or those who would stretch their term well into retirement

A rate-and-term refinance replaces your current mortgage with a new one, usually to lower your rate or change your term, without taking cash out. It can pay off if the new rate is meaningfully lower and you’ll stay in the home long enough to recoup closing costs. Be wary of resetting to a 30-year term if you’re well into your current loan, since this can add years of payments during retirement.

Cash-out refinance

• Who it fits: Homeowners with substantial equity who need a large sum
• Who should avoid: Homeowners who would give up a low existing rate

With a cash-out refi, you’ll get a brand-new mortgage and cash out some of your home’s equity in a lump sum. However, it replaces your current mortgage. So like a rate-and-term refinance, you should only choose this option if you can handle a new term or are able to secure a low interest rate.

Home equity loan

• Who it fits: Homeowners with a one-time expense and room in their budget for a second payment
• Who should avoid: Homeowners on tight fixed incomes

A home equity loan is a lump-sum loan that uses your home’s equity as collateral. They usually have fixed rates, fixed monthly payments and terms between five and 30 years. You’ll typically need at least 20% equity to qualify.

Home equity line of credit (HELOC)

• Who it fits: Homeowners who want a flexible cushion for repairs or other irregular expenses
• Who should avoid: Homeowners  who can’t absorb variable rates or rising payments

A HELOC is a variable-rate product that works similarly to a credit card: You’re given a line of credit to draw on as needed. You’ll have a certain number of years to draw the money, and then a certain amount of time to repay the loan. The amount you pay each month will depend on how much you borrowed and the rate you borrowed at.

No-document mortgage

• Who it fits: Borrowers with income that’s hard to document 
• Who should avoid: Borrowers who qualify for a conventional loan, since rates and costs are higher

A no-doc mortgage allows you to qualify with alternative documentation, such as assets or bank statements, rather than traditional proof of income. These loans typically carry higher rates and require larger down payments than traditional mortgages.

Bank statement loan

• Who it fits: Self-employed borrowers, including retirees with consulting or business income
• Who should avoid: Borrowers with traditional retirement income

A bank statement loan allows you to qualify for a mortgage using bank statements instead of tax returns or W-2s. This can be useful if you have income from a business or other source.

Asset-based loan

• Who it fits: Retirees with substantial assets but modest income
• Who should avoid: Borrowers who need to retain their savings to cover living expenses

Also called asset-depletion loans, these products provide financing based on your assets, such as bank and investment account balances. While they’re a good choice if you have multiple assets to draw from, they won’t work if you need liquid savings to cover your everyday expenses.

Reverse mortgage

• Who it fits: Homeowners with significant equity who plan to remain in the home long-term and have weighed the costs
• Who should avoid: Homeowners planning to move soon, or who want to leave the home to heirs free and clear

A reverse mortgage lets homeowners 62 and older convert home equity into cash, either as a lump sum, monthly payments or a line of credit, with no monthly mortgage payments required. These loans carry significant costs and risks, so ensure you know what you’re getting into before you borrow.

Reverse mortgages are risky

Reverse mortgages are often pitched as easy retirement income, and older homeowners can be targets of misleading ads and high-pressure sales tactics. They are only available to borrowers 62 or older, but they pose significant risks — in addition to being a costly product for most people.

• They eat into your home equity. Interest and fees are added to your balance every month, so the amount you owe grows over time, often leaving much less equity for you or your heirs.
• They’re expensive to borrow. Origination fees, closing costs and an upfront FHA mortgage insurance premium can contribute significantly to what you borrow.
• You can still lose your home. You must keep paying property taxes and homeowners insurance in addition to maintaining the property. If you fall behind, the loan may default and lead to foreclosure.
• The loan comes due when you leave. Repayment needs to start when the last borrower or a non-borrowing spouse dies, the home is sold or the borrower permanently moves.
• They can impact benefits. Proceeds you hold onto may count as assets for means-tested programs like Medicaid and Supplemental Security Income (SSI).

Before considering a reverse mortgage, look at alternatives such as downsizing, a home equity product or any property tax relief programs offered by your state. A HUD-approved housing counselor can walk you through your options and help you complete required counseling if you do choose to pursue a reverse mortgage.

How to qualify for a mortgage in retirement

When an older borrower applies for a mortgage or another type of home financing, lenders look at the same financial criteria as they do for any other borrower, including credit history and score, DTI ratio, income and assets.

Credit score

These are the minimum credit scores needed based on loan type:

Fannie Mae no longer sets a 620 minimum for loans approved through its automated underwriting system, but some lenders still require one.

Keep in mind that meeting the minimum score can get you approved, but it won’t get you the lender’s best rate. Borrowers with scores of 780 or higher typically qualify for the most competitive conventional loan rates.

You can check your credit reports from Equifax, Experian and TransUnion for free each week by visiting AnnualCreditReport.com. The reports don’t include your credit score, but reviewing them lets you find and dispute errors before applying for a loan.

DTI ratio

Your DTI ratio compares your monthly debt payments with your gross monthly income, using this formula: 

DTI = Monthly debt payments (including mortgage or rent) / monthly gross income x 100

Some lenders allow a DTI ratio as high as 50%, but most prefer you spend less than 45% of your monthly income on debt payments, including your mortgage. A lower DTI can help you get a better rate, and a high DTI may prevent you from qualifying. 

Income verification

In addition to proving your identity, you’ll need to provide documentation of your income. If you’re retired, valid income might include:

It’s likely that you’ll need bank statements to prove these deposits and show you’re steadily collecting income.

Investment income — capital gains, dividends, distributions and interest — is reported on your tax return. For the income to be used to qualify you for the loan, you’ll need to provide two years’ worth of returns.

Next steps

If you’ve reviewed your finances and know that a mortgage is the next step, start by comparing mortgage rates. This will help guide you toward an affordable loan through retirement. You may also want to consider a shorter mortgage, if it fits your budget.