Do the chances of being granted a mortgage fluctuate according to your age? The answer is yes. Indeed, age certainly does not influence the credit scale, but it can change the percentage of loan insurance. On the other hand, the tightening of the conditions for granting mortgages and the drop in usury rates – the maximum rate at which it is possible to borrow – constitute a real obstacle to access to credit for seniors. Moreover, “only 3% of borrowers are currently over the age of 60”, indicated the loan brokerage network Vousfinancer, in a study carried out in 2021. This is justified by the transition to retirement age, during which the fall in income “can range from 15 to 40% depending on the case”.
If there is no maximum age for acquiring real estate, banks remain cautious when the risk of death before the term of the loan is too high.
As a general rule, banks accept credit subscriptions up to 65 or even 70 years. Beyond that, the task becomes more complicated. The contribution requested will be much larger and the proposed repayment period much shorter. After 75 years, the chances of obtaining a mortgage are almost nil, reports the specialized site Radins.com.
Does this mean that there is an ideal age to borrow from the bank for a real estate investment? What are the differences in the terms depending on the age of the borrower?
Officially, there is no ideal age for a mortgage. On the other hand, taking out a mortgage when you are young can be advantageous, especially in terms of duration. You can indeed run your loan over a long period (25 years and more), in order to reduce your monthly loan payments as much as possible.
Another significant point, by borrowing young (up to 30 or 35 years old on average), you can finance your property during your career. You will thus have nothing more to repay once retirement is reached. This will make it possible to compensate for all or part of your loss of income, when your rights are liquidated.
If you finish your loan before reaching retirement age, you can also, for example, place the amount corresponding to your loan in a banking product (passbook, life insurance, PER) in order to build up a good retirement supplement.
What about after 50 years?
After 50 years, you will unfortunately not always have the possibility of borrowing over 25 years. Your monthly payments will therefore be higher and will then automatically increase your debt ratio. The latter which must not exceed 35%. Your real estate project could thus be shaken.
If there is no ideal age strictly speaking to borrow, it is better to do it as soon as possible. You will thus be able to build up a wealth, without major financial effort, by taking advantage of the leverage effect.