Buying a House at 65 Years Old: Major Pros and Cons

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By Jessica Johansen Updated July 8, 2024

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If you're considering buying a house at 65 years old, you should first look at your financial portfolio and possibly speak with a financial advisor to determine whether this investment makes sense for you.

Next, you should find an experienced realtor who knows the local market and can help you find the right house for your goals. You can start comparing top local agents here.

Is 65 years old too old to buy a house?

If you're 65, you're not too old to buy a house — provided you have the finances to make a down payment, cover your monthly mortgage payments, and keep up with expenses like maintenance and property taxes.

In fact, the Equal Credit Opportunity Act forbids mortgage lenders from discriminating based on age.[1] And 20% of all home buyers in 2023 were at least 68 years old.[2] Some loans even have minimum age requirements for buyers receiving retirement benefits (e.g., Social Security). For example, reverse mortgages are exclusive to people aged 62 or older.

However, when you're 65 or older, it’s hard to predict whether you'll stay in the house long enough for a good return on investment. And you may have limited retirement income that makes it hard to manage mortgage payments.

We recommend consulting a local buyer’s agent and possibly a financial advisor before buying a house at 65 or older. A financial advisor can help you determine whether you're in a good position to buy a home, and a qualified agent can identify properties that have the best chance of appreciating in value over a short time period.

Compare top buyer’s agents near you

Clever matches you with top agents in your area and helps you find the perfect fit. Qualifying buyers can also get cash back after closing.

Is it better to buy or rent in retirement?

The decision to rent or buy in retirement ultimately comes down to your financial situation and lifestyle. Here are some pros and cons to consider.

BuyingRenting
✅ Build equity❌ No opportunity to build equity
✅ No unexpected rent increases❌ Annual rent increases could make your rental unit too expensive
✅ Customize your living environment❌ Can't modify your unit to accommodate mobility restrictions as you age
Homeownership expenses like property taxes, homeowners insurance, and repairs✅ No additional expenses like property taxes, homeowners insurance, and repairs
❌ Can’t easily move if your life situation changes✅ Can move with less hassle
❌ May not have enough time for the home value to appreciate✅ No concern about property value appreciation
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With a house, you’ll have mortgage payments and maintenance costs, meaning you’ll have less disposable income to live off of. Renting will limit your costs but prevent you from building equity in a home as you age.

You'll also want to consider stability versus flexibility. Buying a house in retirement means you don't have to worry about rent increases and can customize your space. But buying also means you're responsible for unexpected repair costs and can't relocate as easily.

Ryan Carrigan, CEO and Co-Founder of moveBuddah, has assisted many senior clients with relocation. He advises:

"A retiree should purchase their own home (as opposed to renting) if they are in stable financial standing and able to sufficiently care for the property itself. Renting is unpredictable because rents are subject to fluxation and the asset-value of owning a home is a better financial investment option.

"If someone does not have portfolio concerns and knows they are not in a position either financially or physically able to upkeep a home, then renting may be a more suitable choice."

If you're not sure which option is right for you, we recommend consulting a financial advisor to see whether buying or renting aligns best with your personal finances and goals.

Should seniors rent or buy a condo?

Pros

  • No exterior maintenance or landscaping
  • Less work to maintain because of smaller size
  • More secure residence, ideal for traveling retirees

Cons

  • Monthly condo fees on top of mortgage
  • The condo board controls much of the building and could raise condo fees
  • Could be harder to sell than a typical house

Condos are a unique option for seniors to consider, since they can either be purchased like a home or rented from the condo owner.

However, condos often have additional fees that can cost $50–1,000 per month ($300–400 on average).[3] These fees cover the condo association’s ongoing costs to maintain the property. When you’re living on a fixed retirement income, extra fees like this could really hurt your budget.

Of course, owning a condo also has some unique advantages, like no exterior maintenance or lawn care.

Purchasing a condo may be a good option if you have the financial means, just make sure you include the condo fees in your calculations.

If you aren’t ready to buy a condo, you might be able to rent one. Renting a condo is similar to renting an apartment. The biggest difference is that you’re renting from the condo owner, not a property management company.

The owner generally pays the condo fees and mortgage themselves and charges tenants monthly rental fees. However, because owners have to cover these costs, they might charge their tenants more for occupying the unit.

Financing a home in retirement

Consider your loan options

There's no maximum age for applying for a mortgage, but it may be tougher to qualify for certain loans. Here are some of your options.

Conventional mortgage

A conventional mortgage is an option if you have a good credit score, reliable income sources (like pensions or Social Security), a low debt-to-income ratio, and savings for a larger down payment. You'll have predictable monthly payments and a competitive interest rate.

Fannie Mae and Freddie Mac have senior home buying programs that allow you to use eligible retirement assets to qualify for a mortgage. These programs may benefit you if you have a lot of savings but a reduced monthly income after retiring.

Reverse mortgage

A reverse mortgage, or home equity conversion mortgage (HECM), is available through the Federal Housing Administration. It allows current homeowners to turn some of their home equity into tax-free cash to cover living expenses or medical bills — without having to sell the house.

An HECM also allows you to purchase another primary residence without making a down payment, as long as you can pay the difference between the HECM proceeds and the sales price plus closing costs. This is especially useful if you’re looking to buy a vacation home away from your primary residence.

To qualify for a reverse mortgage, you must be 62 or older, be a homeowner currently residing in your house, and have paid off most or all of your mortgage.

FHA loan

FHA loans are provided through the Federal Housing Administration. They're a good option if you have a low credit score (as low as 500) and don't have a lot of money for a down payment (you'll need 3.5–10%, depending on your credit score). You'll still need proof of income from things like pensions or retirement accounts and a max debt-to-income ratio of 43%. One downside is that you'll have to pay up-front and annual mortgage insurance premiums (MIP).

VA loan

VA loans are available for veterans and their spouses. These loans have some of the lowest mortgage interest rates possible, often require no down payment, and have exceptions for low credit scores. You'll need to get a Certificate of Eligibility (COE) to qualify. Your income can come from pensions, Social Security, and other retirement sources. If you ever struggle to make a payment, VA loans offer special programs to help you.

Find the right lender

You can save on your financing by finding competitive mortgage rates in advance. Don't get pressured into taking the first mortgage offer you receive — shop around until you find a lender you're comfortable with who's offering you a great deal.

One of the best ways to find a great mortgage lender is to ask your real estate agent for recommendations. Experienced realtors know which local companies offer the best rates, service, and overall value.

Get pre-approved for a mortgage

When you apply for mortgage pre-approval, lenders thoroughly evaluate your finances, including these areas:

  • Income: When you're retired, your income sources may include pensions, Social Security, investment income, retirement account withdrawals (from 401(k)s, IRAs etc.), annuities, rental property income, and disability income. Lenders typically want at least two consecutive years of tax returns for proof of income. Retirement assets don’t qualify if they’re currently your only source of income.
  • Assets: Lenders may look at your savings, investments, and retirement accounts to ensure you have enough money for a down payment, closing costs, and reserves.
  • Credit score: It’s important to stay on the credit grid after you retire if you want a mortgage. Many lenders will deny your request if you have bad or no credit, so keep making steady payments. A higher score makes you more likely to get approved and get better interest rates.
  • Debt-to-income (DTI) ratio: Keep your DTI ratio low. This lets lenders know you can manage monthly mortgage payments along with existing debts.

You’ll have an advantage if you consult a financial advisor and a buyer’s agent who know the lending procedures in your local market before you apply for financing.

Buying a house at 65 with an agent

Once you decide to buy, your next step is finding an experienced real estate agent.

Your agent can help you find a house that:

  • Has great potential for appreciation
  • Needs little to no repairs and minimal ongoing maintenance

If you're looking for a realtor, Clever can help you find the best agents from top local brokerages. Start comparing top agents.

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FAQ about buying a house at 65

What is the average age to buy a house?

The median age of a first-time home buyer is 35, and the median age for a repeat buyer is 58.[4] However, 20% of all home buyers are 68 years old or older.[2]

What age should you buy a retirement home?

The earlier you purchase a home for your retirement, the more you can take advantage of home equity. This is especially true if you need to take out a mortgage to finance your purchase. We recommend consulting with a financial advisor and a top buyer's agent to decide if purchasing a home is the right fit for your retirement goals. Learn how to find the right real estate agent.

Is it smart to buy a house after retirement?

Buying a house after retirement can be a good decision if you're financially stable and it suits your lifestyle. But it's likely not the right choice if the ongoing costs will strain your budget and if too much of your net worth will be in the property. Before buying a home, make sure you have enough liquid assets for living expenses and emergencies, and consult a financial advisor to confirm it fits your retirement strategy.

How much of net worth should be in a house at age 65?

A common recommendation is to have 25–40% or less of your net worth in your house. By the time you retire, it's best to have diversified investments instead of having most of your net worth in one home. However, the right investment diversification depends on your finances and goals. Talk to a financial advisor for personalized advice.

Can a 65-year-old get a 30-year mortgage?

Yes. Basing mortgage approval on age is illegal under US federal law. Plus, you may still be working and have retirement vehicles that count toward your debt-to-income ratio, which can give you some leverage when applying for a mortgage at 65. Make sure you have documentable and stable income and assets to satisfy the credit requirements for the loan program you're applying for. Learn more about financing a home in retirement.

Can a 70- or 80-year-old get a 30-year mortgage?

Yes. Legally, banks are only allowed to offer loans based on financial qualifications. Also, you can use your retirement assets for the loan you want, which gives you an added opportunity to qualify. But if you're on a fixed income such as social security, with cost-of-living increases, it may not make sense to get a 30-year mortgage. Consult a financial advisor and a buyer’s agent to determine your best path forward.

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Article Sources

[1] US Department of Justice: Civil Right Division – "The Equal Credit Opportunity Act". Updated Jan. 25, 2024.
[2] National Association of Realtors – "2023 Home Buyers and Sellers Generational Trends Report". Pages 13.
[3] Condo Manager – "Condo Fees: Everything You Need To Know". Accessed June 2024.
[4] National Association of Realtors – "Quick Real Estate Statistics". Updated Mar. 21, 2024.

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