How to get a mortgage for a pensioner - a detailed guide + tips on how to increase your chances of getting a mortgage loan

More recently, mortgages were issued only to employed young citizens of the Russian Federation, but now there are various programs and conditions that allow a loan to be issued to a pensioner.

Nowadays it is common to think that all pensioners live in their own living space and there is no need for them to get a mortgage. However, this is not the case. The most common reasons for a pensioner to apply for a mortgage are:

1. purchasing your own real estate;
2. improving living conditions in an existing apartment/house;
3. purchasing real estate as a gift to children/grandchildren.

The state makes concessions and offers several options for obtaining a mortgage.

Requirements for a borrower of retirement age

Basic nuances that are found in almost all financial institutions.

1. The main conditions for issuing a mortgage are Russian citizenship and permanent/temporary registration.
2. As the law states, monthly loan payments should not exceed 45% of the client’s income.
3. The age of the pensioner should not exceed the maximum established by the bank. If the age is set at 65 years, this means that by this time the debt must be repaid. When applying for a loan, for example, for 5 years, the borrower must be 60. The age limit depends on the specific organization.
4. Since issuing a mortgage to a pensioner carries a risk for the bank, which is associated with the sudden death of the client, an additional document is life insurance, which implies cash expenses.
5. It will be easier for a married couple to get a loan, since their total income is taken into account.
6. A positive credit history of the client will be a good addition to the package of documents.
7. It will be difficult for a citizen over 50 to get credit money.
8. Working pensioners are more likely to have their mortgage application approved, since there is additional income in the form of wages (a certificate of income for the last 6 months must be attached to the main documents).
9. The choice of loan program is individual.
10. Mortgages are most easily issued to military personnel and employed pensioners.
11. A non-working pensioner will need to at least provide guarantors (they can be both relatives and other persons).

Types of real estate purchased with a mortgage

Banks operating in the Russian Federation offer mortgage lending for the following types of real estate:

1. Country housing:

• plot of land
• country house,
• cottage,
• private house (including with an existing land plot).

1. Housing in the city:

• a private house,
• apartments,
• apartment in a secondary housing stock or new building,
• room in a communal apartment,
• share in the apartment,
• garage space,
• townhouse.

Types of mortgage lending for pensioners

Each bank works with its own categories of clients and is more willing to lend to employed citizens. But for a pensioner who provides a guarantor, obtaining a mortgage will become a reality.

Banks offer several types of loans, or rather 7 options.

According to the family program

A pensioner can involve his relatives as guarantors. When considering an application for this program, the financial institution takes into account the income of all family members. And this is the most realistic option for approval and obtaining a loan.

Interest-free mortgages are rare in 2020

The housing loan agency provides preferential conditions for obtaining interest-free mortgages to pensioners. It is issued in two cases.

1. Test program for lonely elderly people who have no relatives. Until the end of the client's life, equal amounts of money are credited to his account. But after his death, the property becomes the property of the bank (the agreement is signed immediately).
2. The client receives money that he can spend on improving living conditions. Own real estate is transferred to the bank as loan repayment. Two years later, the housing “donated” by the pensioner is sold. If the proceeds from the sale are not enough to completely cover the mortgage debt, the borrower repays the balance with his own funds.

Both of these options are more than doubtful. Before agreeing to them, you should think everything over carefully.

Without a down payment - difficult, but possible

Expert opinion

Kochetov Vladimir Viktorovich

Leading specialist in finance. 23 years of experience in a large bank in Moscow. Specialization: loans, mortgages, refinancing.

Ask a Question

This mortgage option is available to all categories of clients. But it also has its pitfalls. The percentage for such a program is much higher (up to 5 points). Accordingly, the overpayment will ultimately be much greater. Since the rate depends on the down payment, if there is no down payment, the maximum overpayment is assigned.

For employed and unemployed older people

Both employed citizens and those who have no income other than a pension have the right to get a mortgage. In the second case, the pensioner is recommended to attract guarantors to increase the likelihood of approval of the application.

Financial institutions have the right to independently set age limits for their clients. The average maximum age is 65 years. Some banks extend this limit to 70–85 years. That is, at the time of the last payment of the debt to the client, it should not be more than the specified years.

Not working

As we have already found out, it is quite possible for a pensioner to get a mortgage if he has the ability to make monthly payments and make a down payment. It is worth recalling that when calculating the above amounts, the client must have 55% of the income for personal use: for food, utility bills, purchase of necessary things, and so on. The remaining 45% goes to pay off the debt. This percentage is calculated from the provided income certificates. If the amount remaining from paying the bank is not enough for a normal life, it can be recalculated and reduced somewhat.

One of the main requirements for a non-working pensioner to obtain a loan is to attract guarantors if the only income is social benefits.

In second place is age. Even if the client’s financial parameters meet the bank’s requirements, his application will not be approved if the maximum age limit in a given financial institution is 70 years, and he would like to receive a loan for 5 or 10 years at the age of 68. His years are the deadline for full repayment of the loan.

Next are requirements such as registration, citizenship, documentary proof of income, and the like (depending on the chosen program).

Banks ready to give loans to non-working pensioners

There are few such organizations, but they do exist:

• Sberbank,
• Tinkoff,
• Sovcombank,
• VTB Bank,
• Eastern Bank,
• Post Bank.

Working

It is much easier for this category of citizens to get a mortgage, since they have a stable double income. Therefore, banks are more willing to approve their applications. In addition, working pensioners lead an active lifestyle, which has a positive effect on both health and life expectancy.

If a person is already a client of a bank and wants to apply for a mortgage there, then proof of income is not required. Even when applying to another bank, the chances of getting your application approved are several times greater.

Requirements for working pensioners do not differ from the standard conditions for all other clients. There is also an age restriction. The package of documents remains the same.

Reverse mortgage - a new type of banking services

Lending under such a system occurs on a certain condition: the client is provided with money, but after his death, the real estate that was purchased with it becomes the property of the financial organization.

Cash payments to the client through the bank can be in three options:

• one-time payment of the entire amount;
• monthly payment of funds until the client’s death;
• regular money transfers for up to 10 years (no more).

Not all banks operate under such a program due to their riskiness. There have been recorded cases where relatives challenged such a decision through the courts.

This option is suitable for those elderly citizens who do not have relatives or heirs and need additional means for subsistence. Not only pensioners can take advantage of this program.

There are several interesting nuances here:

• relatives can challenge this agreement in court with a mandatory return of the entire amount paid by the bank;
• if the client dies before 10 years, the apartment is sold, and the remainder after repayment of the debt is transferred to the heirs (if any);
• if the pensioner lives longer, he will be able to continue to use the living space, but without receiving payments.

Requirements for the borrower:

1. age at least 65 years;
2. Russian citizenship;
3. It is not allowed to have disabled people under the client’s care;
4. the presence of other owners, with the exception of the spouse, is not allowed;
5. there are no debts for utilities;
6. requirements for real estate: the number of floors of the house is from 4 floors, the building is not in emergency condition, all necessary communications are provided, and so on;
7. the object must be insured;
8. good location of housing.

In this case, you can count on 100% loan approval, since there are practically no risks for the bank.

For military pensioners

According to current legislation, this category of citizens with more than 10 years of service can count on a military mortgage. The loan is provided at a reduced rate, making it possible to repay the mortgage early. An important nuance is that state benefits can only be used to pay off mortgage debt.

This financial assistance is paid to those elderly people whose service life is more than 10 years.

To participate in the program, the borrower must be a participant in the savings-mortgage system, the purpose of which is to provide housing for former military personnel.

The age limit in this case is 45 years. By this time, a person can already retire. Therefore, if you take out a loan at the age of 35, you will have 10 years to repay the debt. The main requirement is to remain a military member until the end of the loan repayment period. If the condition is not met, government payments stop and the debt must be repaid from your own funds. When applying for a subsidy, a serviceman has the right to receive a mortgage without a down payment and without interest.

If there is a good reason for leaving the service (for example, medical), then payments will continue.

The procedure for taking part in the savings-mortgage system and the persons who have access to it, as well as the procedure for providing real estate, are described in Order No. 166 of the Ministry of Defense of the Russian Federation.

Secured by real estate

In this case, the mortgage is issued in two options:

1. secured by existing real estate;
2. secured by the purchased property.

In the first option, it is easier for a pensioner to obtain a mortgage loan. In the second, the application is approved mainly for employed citizens with a confirmed income.

Pensioner as a co-borrower

First of all, you need to consider the difference between a co-borrower and a guarantor. The first has equal rights to use the loan money received, and the guarantor only takes responsibility if the borrower stops paying.

Expert opinion

Kochetov Vladimir Viktorovich

Leading specialist in finance. 23 years of experience in a large bank in Moscow. Specialization: loans, mortgages, refinancing.

Ask a Question

A pensioner can become a guarantor, but a co-borrower - at the discretion of the bank. As a rule, this happens if the monthly payment does not exceed 40% of the income. On an individual basis, a financial institution may require life insurance.

If a pensioner is allowed to act as a co-borrower, he must meet the following requirements:

• have Russian citizenship;
• be the spouse or child of the borrower;
• have permanent registration in the Russian Federation;
• confirm the ability to pay the debt;
• comply with age restrictions;
• have a 2NDFL certificate.

The following citizens are not considered as co-borrowers:

1. in management positions with the right to endorse legal financial documents;
2. are private entrepreneurs;
3. are members of farms;
4. founders of organizations whose share exceeds 5%.

These same categories are not considered as borrowers if the accounts do not officially pass through the accounts of a given bank.

Reviews about mortgages for pensioners

Gordina Ekaterina:

Osinkin Sergey:

“After retirement, my wife and I continued to work and decided to take out a mortgage to buy another apartment. We contacted Gazprombank. They immediately calculated everything for us and offered us an option that suited us both in terms of term and interest rate. Everything was approved quickly, although we had to involve our daughter as a co-borrower.”

Emelyanov Anatoly:

Prokopchenko Svetlana:

“I worked in the north for many years and retired early. But I immediately decided that I needed to move closer to my children, which meant I would have to take out a mortgage. I finally turned to Rosselkhozbank. They told me in detail about all the conditions and helped me fill out an application for a loan. At all stages, managers informed about what documents were needed and when they needed to be provided. Largely thanks to their attentiveness, the transaction went through without the slightest problem.”

Documents for registration - general list

When submitting an application to the bank for a mortgage loan, you need to have the following package of documents with you:

1. completed borrower application,
2. a copy of the Russian Federation passport with a registration mark,
3. pensioner's ID,
4. certificates of income: wages, pensions (from the Pension Fund), additional income,
5. confirming insurance document,
6. documents for property secured by security, as well as for purchased real estate,
7. for working pensioners, a copy of the work book, certified by the management of the enterprise,
8. certificate of registration of ownership,
9. extract from the house register,
10. medical policy.

If there is a guarantor, then the package of documents is similar.

To be sure of what papers you need to prepare, you should contact the bank where you plan to receive a loan.

It is important to remember that it is possible to obtain a loan by providing only reliable information.

It will take several days to review the application and announce the decision.

Requirements for pensioners

Since credit institutions have not developed separate programs for older people, those wishing to take out a mortgage for a pensioner for housing will have to focus on the standard requirements:

• age from 18 to 65 (less often up to 70) years at the time of debt repayment;
• Russian citizenship;
• residence in the region where the bank is located (presence of a real branch);
• presence of permanent residence or registration in the country;
• the presence of stable, regular income that allows you to make monthly payments.

Additionally, it is necessary to find out in advance the requirements for the purchased living space, since not every purchase will be approved. In addition, the specified conditions are approximate and may differ from what is actually required. The exact parameters depend on the program chosen by the client and the institution where the application is submitted.

Documents for a mortgage for a pensioner

Considering the above, the list of documents that an elderly person will have to prepare does not contain anything unusual.

Full package includes:

• passport and its copy;
• completed application form (filled out on the website or in the branch);
• a certified copy of the work record book, if the person is officially employed;
• certificates and papers confirming receipt of permanent income.

A pension certificate is not required, but bank employees can request additional papers that will allow them to evaluate the application and decide whether to approve or reject it.

Military mortgage for pensioners

Retired military personnel cease their participation in the NIS, but receive the right to withdraw the accumulated money. They can be used to improve housing conditions, including making a down payment. The accumulated amount will be enough to convince lenders to approve the loan. Otherwise, the lending procedure does not differ from that described above. That is, purchasing housing and receiving money takes place in the standard mode: in rubles, depending on the cost of housing and the chosen program. In this case, it is advisable to get a job, since managers may consider receiving a pension insufficient for approval.

Assistance from the state - to whom it is issued and under what conditions

Clients of retirement age have the right to receive government assistance in the form of subsidies that pay off up to 30% of the debt. To do this you need:

• to be a citizen of Russia,
• provide a pension certificate,
• provide an extract from the Pension Fund on receipt of payments.

To apply for financial government assistance, you must follow the following instructions:

1. contact the district administration,
2. find out about the possibility of receiving a subsidy in a specific case,
3. take a list of required documents,
4. start collecting the documentation package,
5. contact the relevant authority, submit the papers and fill out the appropriate application.

On average, it takes at least 1 month to process an application.

It is important to note that this program only applies to mortgage lending. It does not apply to consumer loans.

According to the latest data, the program will operate until 2022.

Pensioners under 75 years of age can take advantage of this offer. The subsidy is paid only if you apply to:

• Rosselkhozbank,
• Sberbank,
• VTB bank.

Current offers from banks

Among the largest banks in Russia there are several attractive lending options available to people of retirement age.

Before choosing a program, it is recommended to clarify your chances and optimality:

• agreed amount;
• payment amount;
• payment period;
• additional requirements of the creditor.

When choosing a program from the largest banking institutions, you can be sure of maximum transparency of conditions and reliability of the lender:

1. Sovcombank has a unique offer for citizens under 85 years of age. Mortgage rates average 11.4% with repayment options over two decades.
2. It is extremely difficult to get approval for a mortgage through VTB 24 when you are elderly. Strict year restrictions do not allow loans to persons receiving an old-age pension. Subject to the availability of work for persons who worked in law enforcement agencies, as well as for figures in the field of art, there is a chance of agreeing on favorable terms for a housing loan.
3. A mortgage from Sberbank will help solve problems with housing if you choose a program with repayment before the age of 75. The bank rate is 12.0% per annum, however, due to constant changes, it is recommended to update the information about the percentage before visiting the bank. Cooperation with Sberbank is most preferred among older citizens as the most convenient, reliable way to get a profitable loan on the best terms.
4. Rosselkhozbank offers loans up to 75 years at 12.5% ​​if you plan to purchase housing worth up to 8 million rubles. One of the few banks that do not have strict boundaries regarding determining the age limit of citizens. The loan duration reaches 25 years.
5. On general terms, it is recommended to consider the proposals of Tinkoff Bank, in which the mortgage rate is set in the range of 8-14%. Providing comfortable conditions for concluding a transaction and accessible lending parameters, the bank treats people of advanced age with caution. The loan is issued with the expectation of repayment by the age of 70 years.

To make it easier to choose the best offer, studying the latest news in the field of mortgage lending and financial structures, as well as actively working with online calculators posted on specialized resources or the official pages of banks will help.

We recommend reading: Is it possible to sell an apartment with a mortgage?

Types of insurance – primary and secondary

When applying for a mortgage loan, two types of insurance documents are often required.

Compulsory insurance is the best way to protect yourself in the future

This includes life insurance for retirees. Since issuing a loan to an elderly person is a risk for a financial institution, it can only minimize the risk of losing funds due to the death of a client through insuring his life. In this case, the insurance company pays off the outstanding debt to the bank.

If this requirement is mandatory, then the insurance amount will be 6–10% of the loan amount, which amounts to a lot of money. The service is paid personally by the client immediately or included in the total debt.

When signing an agreement, you should carefully read the list of unforeseen situations when the responsibility for paying the debt rests with the co-borrower.

Typically, this condition is imposed on people over 45 years of age. If the client does not agree to comply with the requirement, the bank has the right to refuse to issue a mortgage. If the refusal of life insurance occurs after the application is approved, the loan is cancelled.

Additional insurance - imposed by most banks

Insurance of collateral is an additional document. This is a mandatory condition of all banks where they issue secured mortgages.

Disability insurance is at the client's discretion.

Pros and cons of mortgage lending

pros

Mortgages for pensioners have their advantages:

• long loan term (up to 30 years);
• selection of loan issuance programs, which allows you to determine the most suitable one for a particular client;
• reduced rates;
• promotional offers for the purchase of specific real estate at a reduced rate;
• reverse mortgages for single elderly people allow them to receive additional financial assistance in exchange for their living space;
• the possibility of obtaining a mortgage without a down payment if you already own real estate.

Minuses

The disadvantages are:

• additional expenses (insurance, appraiser services, opening an account);
• in case of late payment, additional monthly interest is charged;
• Quite a long time for a decision to be made on an application;
• large down payment;
• strict conditions for borrowers;
• difficulties in obtaining a loan for non-working pensioners.

How to get a mortgage for a pensioner

To get money to purchase housing, you will need:

1. submit an application;
2. after receiving approval, enter into an agreement;
3. choose a suitable living space;
4. complete the purchase and register ownership of real estate;
5. take care of insurance and transfer of real estate as collateral.

The process of obtaining a mortgage for pensioners without a down payment is no different from that described above, only the likelihood of getting approval and the size of the down payment changes.

Advice for those planning to take out a mortgage

1. If the pension payment is made in one bank, and the mortgage application is submitted in another bank, then it is necessary to provide an extract from the pension fund for 6 months.
2. It is advisable to stock up on savings in order to make monthly payments on time in case of an unforeseen situation.
3. Have a positive credit history.
4. If the pension is paid using “plastic”, then you must attach an ID and passport.
5. It is recommended to open a replenishable account in the bank where the application is submitted. This will increase the likelihood of its approval.