Retirement is often seen as the finish line. But for many, it’s actually the beginning of a new chapter filled with choices. Where you live, how you live, and what you want your day-to-day to feel like all come into sharper focus.
Whether that means downsizing, upsizing, relocating, or even buying your very first home, one question tends to come up: Can I still qualify for a mortgage once I’m retired?
It’s a fair question, and one that’s often misunderstood.
In this piece, mortgage expert Kristi Hyson breaks down what lenders are really looking for when it comes to retirement income, how different income sources are treated, and what options exist if your income structure changes after you leave the workforce. From net worth programs to amortization flexibility, there’s more available than most people realize: if you know how to position yourself correctly.
If you’re approaching retirement or already there and considering a move, this is the clarity you want before making any big decisions.
If we can connect you with Kristi for further information, please don’t hesitate!
When clients retire, their income typically decreases based on the sources of income set up to be received in retirement. When it comes to qualifying for a mortgage, the income verification process is the same for all provable income, as if you were employed. Retirement income can come from a company pension, CPP, OAS, investment income (two years’ history required), etc.
With retirement income if you do not have a guaranteed pension from a company you’re retiring from and will be collecting income from your Investments (registered/unregistered) most lenders are going to want to have a 2-year average of the income claimed. However, there are net worth programs available with some A lenders and with alternate lenders as well. The networth program allows you to use the value of your investments as income. The networth lending programs do require a minimum amount of assets to qualify under the program (varies between lenders). Based on the value of the investments and other income claimed, a purchase price can be calculated to support your purchasing needs.
A client is never too old for a 25 or 30-year amortized mortgage. Lenders will consider providing an amortization period of up to 30 years based on a client’s lending profile, as long as they qualify for the mortgage.
If a client is looking at retirement and wants to upsize or downsize, or do something that would require them to qualify in the future, it is recommended to speak with a mortgage broker before finalizing retirement plans with a decrease in income. Purchasing before you retire may be worth considering. If you make a purchase before you retire, the income used to qualify is your current income.
Investments in retirement are a good resource to leverage for net worth programs. Investments that lenders will consider for net worth programs include savings, registered/unregistered investments, and cash surrender values in insurance policies. The lenders will consider other investments as long as they can be liquidated, if needed, without any restrictions other than tax deductions. Some lender programs with alternate lenders may consider including equity in real estate, depending on the loan-to-value and current encumbrances on title.
Previous homeownership is not important. If by chance clients are purchasing their first home at or before retirement, and as long as you meet lender qualification requirements, you can purchase. It doesn’t matter your age; lenders look at credit, character, collateral, and capacity as part of the underwriting process to determine affordability and qualification for purchasing a property. Lenders really don’t discriminate against age as long as there’s affordability and the client can demonstrate they can make the payments and are otherwise creditworthy to meet lender guidelines, then they can purchase.
Kristi Hyson – Mortgage Broker, Indi Mortgage
I’ve built my reputation as a mortgage problem-solver and advocate for clients in tough financial situations. I am not your average mortgage broker; I am a Mortgage Matchmaker who solves mortgage problems. I specialize in turning “no” into “yes” and delivering outcomes that change lives.
I am not here for the cookie-cutter cases. My expertise lies in tackling the complicated: business owners with unique income structures, high-net-worth clients, and individuals who have been declined elsewhere. As a direct-to-consumer refinance specialist, I offer bold solutions with efficiency and integrity.
