Is getting a mortgage in retirement possible when you no longer receive a regular paycheck?
The good news: Yes, it is.
However, qualifying for a mortgage with retirement income comes with specific requirements. The rules are similar to getting a mortgage before retirement. You’ll need reliable income, now and for the foreseeable future, that shows you can repay the mortgage. You also need good credit and little debt. (Your age shouldn’t come up at all. The Equal Credit Opportunity Act prohibits creditors from discriminating against loan applicants because of their age.)
Check your eligibility for a retirement mortgage today (Nov 4th, 2026)
How getting a mortgage in retirement works
Getting a loan, even when you aren’t retired, depends on your income, credit history, amount of debt, and your assets. For retirees, assets become even more important because many won’t have regular income except for possibly Social Security benefits.
“It’s an individualized situation. Some people wouldn’t dream of having any debt when they retire. Others are OK with it,” says Peggy Doerge, a vice president of underwriting at MidWestOne Bank and a past president of the Iowa Mortgage Association. “In fact, some retirees get advice from their financial advisors to refinance their current mortgage or take out a new mortgage.”
For example, say a retiree earns more on their assets than the rate on a mortgage they can qualify for. If they can also deduct the mortgage interest, which requires that they itemize deductions, then a loan makes sense, says Doerge.
Which retirement income counts toward getting a mortgage
When a retiree applies for a mortgage, their retirement income should be steady and predictable. It also needs to be likely to continue, whether the retiree is upsizing or downsizing. “In general, lenders are looking for cash flow at regular intervals,” says Mike Egermier, financial consultant at Egermier Wealth Management Group. “A pension is viewed more favorable compared to an IRA in the stock market.”
Retirement income can come from a variety of sources including:
- Social Security income. If the Social Security income is for the retiree, lenders consider it to have no expiration date. But some Social Security income comes from a family member, like survivor or spousal benefits. In that case, the borrower must prove that the income is secure for at least three more years.
- Retirement or pension income. Lenders don’t expect this asset to expire and can count it as income. Some pensions decrease the income amount for surviving spouses, though. Make sure that your spouse can cover all the bills, plus the mortgage, in the event of your passing.
- Annuities. If the borrower can document that this income will continue for at least three years, then they can list it on the mortgage application.
- 401(k)s, IRAs, and Keogh plans. The retiree needs unrestricted access to these accounts without incurring any penalties. Those under 59 ½ years of age usually can’t withdraw funds from their 401(k) without paying withdrawal penalties. Distributions from these investments must last for at least three years after the date of the mortgage application. Also, if your distributions vary, lenders use an average of the amount received rather than your latest payment.
Get started on your retirement mortgage today (Nov 4th, 2026)
Credit score
In general, having a good credit score is a prerequisite for loan qualification, but each lender has different requirements. Credit score requirements can also vary depending on your situation like the type of loan and your down payment amount. For example, FHA loans require a larger down payment for lower credit scores. Your credit score also affects the interest rate you’ll qualify for. Generally, the higher the score, the lower the interest rate.
Debt-to-income ratio
Your debt-to-income ratio also plays a part in getting a mortgage in retirement. Your DTI compares all of your monthly debt payments to your gross monthly income. That includes car, credit card, and student loan payments, plus the monthly mortgage payment with property taxes and homeowners insurance. There is no single federal limit. Each lender and loan program sets its own maximum DTI, so ask your lender what it allows.
Is getting a mortgage in retirement a good idea?
Before retiring, it’s a good idea to meet with a financial advisor and a loan officer. Ask them about your retirement mortgage options. These financial professionals should direct you to specific mortgage programs that are the best for your situation. Ultimately, that can help save you money.
It’s also important to have a budget before talking to a lender. You need to know how you’ll cover costs if inflation hits or your property taxes skyrocket, says Egermier. He also adds it’s important to factor in costs if a medical problem arises or your health insurance costs significantly increase.
“One trip to the hospital can eat away at your savings.”
To decide if getting a mortgage when retired is a good idea, you should know the answers to the following questions. For some of them, you may need to consult a financial professional:
- Will your income decrease after retirement?
- How long will your income last?
- Is your current home paid off?
- Are you eligible for tax breaks that will increase your income?
- How will your household income change if a spouse passes away?
- Are you comfortable incurring more debt?
Should you pay off your mortgage or invest in additional retirement savings.
According to the Center for Retirement Research’s study titled “Should You Carry a Mortgage Into Retirement” paying off your mortgage is the better choice unless you “can earn a risk-free return that exceeds its mortgage interest rate; or cannot satisfy its demand for risky assets without borrowing money. Few meet these exceptions, so the payoff option is the best bet.” Basically, this minority is those who are willing to invest at least their loan amount in stocks.
Should you pay off your mortgage or refinance your mortgage before retirement?
Refinancing is generally a good idea if it lowers both the mortgage payment and interest rate. But only the retiree can answer whether it’s best for their situation. It depends on their income, current mortgage payment and amount in savings. It also depends on whether the tax advantage of the mortgage interest, which applies only if they itemize, is enough to counteract their expenses.
Get started on your retirement mortgage today (Nov 4th, 2026)
