Retirement Mortgages for Seniors and Retirees

A retirement mortgage is a home loan for seniors and retirees who no longer have a paycheck but want to buy or refinance a home. Instead of W-2 income or recent pay stubs, lenders count Social Security, pensions, annuities, and retirement accounts, which lets retirees qualify on the wealth and income streams they have already built. Our guide to how retirees use retirement assets to buy a home walks through each option.

Yes. Many retirees qualify by blending Social Security, pension income, and annuities with income calculated from eligible assets. Combining the sources gives you more purchasing power and makes it easier to meet lender guidelines.

There is no single number. It depends on the loan amount, down payment, and any fixed income you receive. Retirees with $500,000 or more in retirement accounts or savings often have enough to qualify, and larger balances support higher loan amounts. The full picture of what lenders look for is in our summary of asset depletion mortgage requirements.

Yes. Lenders typically allow retirement account balances to be used for qualification, especially once you are over 59½, and a percentage of those balances, often 60-70%, counts toward qualifying income. Our explanation of the Fannie Mae asset depletion formula and age 62 rule covers how age affects the calculation.

If your Social Security income covers the debt-to-income requirements on its own, you may qualify on that alone. If not, it can be combined with pensions, annuities, or income calculated from your savings to strengthen the application.

Accepted sources typically include Social Security, pensions, annuities, required IRA and 401(k) distributions, dividends, and investment income. Even without a job, these streams demonstrate repayment ability. Recent changes to Freddie Mac’s asset depletion formula have made asset-based income more generous under conventional guidelines as well.

Yes. Federal law prohibits age discrimination in lending, and retirees in their 60s, 70s, and 80s qualify regularly. What matters is the income, assets, and credit profile. Our ranking of the best mortgage lenders for seniors explains what to look for in a lender.

Yes. These loans work for a primary residence, a smaller home when downsizing, or a vacation property, and they are often the tool that makes a move to a new state practical. Our guide to relocating for retirement covers how to plan the purchase.

Many retirement mortgages are conventional loans, so the rate is the same as any other conventional borrower’s. Non-QM options carry a modestly higher rate in exchange for more flexible qualification. Selling investments to avoid a mortgage often costs more, as our post on using a trust to help buy a house and other asset-based strategies illustrate.

Yes. Pension income counts toward monthly qualifying income, either alone or combined with Social Security and income calculated from retirement assets. Retirees who want to free up cash instead of buying can also look at using a cash-out refinance to fund retirement.