Retirement Mortgages Made Simple

A retirement mortgage is a home loan designed for seniors and retirees who may no longer have a traditional paycheck but still want to buy or refinance a home. Instead of relying solely on W-2 income or recent tax returns, lenders consider a range of retirement income sources—including Social Security, pensions, annuities, and retirement accounts.

This makes it possible for retirees to qualify based on the wealth and income streams they’ve already built, rather than ongoing employment.

How Retirement Mortgages Work

There are several ways retirees can qualify:

• Social Security Income – Lenders count monthly Social Security payments as stable qualifying income.

• Pension Income – Lifetime pension benefits can also be included.

• IRA, 401(k), or Annuity Withdrawals – Certain distributions may count toward monthly income.

• Asset Depletion (Asset-Based Lending) – Instead of requiring withdrawals, lenders calculate income by dividing your liquid assets—such as cash, retirement accounts, or investments—over a set term, usually 60 months.

Typical Scenario of a Home Loan for a Retiree 

Imagine you have $1,000,000 in retirement and investment assets after your down payment. A lender could count that as more than $16,000 in qualifying monthly income. Add in $2,500 per month from Social Security, and your total qualifying income rises to over $18,500 per month—enough to support a mortgage of well over $2 million.

Yes. Many retirees qualify by blending Social Security benefits, pension income, annuities, and even part-time work with an asset depletion calculation. This gives you more purchasing power and helps meet lender guidelines.

There’s no single number—it depends on the loan amount, down payment, and other income sources. In general, retirees with $500,000+ in retirement accounts or savings may have enough to qualify, but larger balances can unlock higher mortgage amounts.

Yes — lenders typically allow you to use retirement account assets (IRAs, 401(k)s, etc.) for qualification, especially if you’re over 59½. Depending on your age, a percentage (usually 60%–70%) of those balances may count toward your qualifying income.

If your Social Security income is sufficient to cover the debt-to-income ratio requirements, you may qualify on that alone. If not, you can combine it with pensions, annuities, or asset depletion to strengthen your application.

Accepted sources typically include Social Security, pensions, annuities, required IRA/401(k) distributions, dividends, and investment income. Even if you’re not working, these streams help demonstrate repayment ability.

Yes. Age is not a barrier—federal law prohibits age discrimination in lending. Many retirees in their 60s, 70s, and even 80s successfully qualify for retirement mortgages. What matters most is your income, assets, and credit profile.

Yes. These loans can be used for a primary residence, downsizing into a smaller home, or even purchasing a vacation property.

Many retirement mortgage options are conventional loans, meaning your rate would be the same as any other conventional borrower. Other options are Non-QM meaning your rate would be slightly higher than a conventional loan. It all depends on your qualifications, goals and objectives!

Yes. Pension income can be counted toward your monthly income, either alone or in combination with Social Security and asset depletion calculations.