Mortgage borrowing age limit rises to 80
8th June 2016
This news article is from Handicare UK. Articles that appear on this website are for information purposes only.
Two of the UK’s biggest mortgage lenders have raised the age limit for those wanting to borrow towards a mortgage in their later years.
Approaching our golden years can mean making difficult decisions for many older homeowners as we deliberate how long we can feasibly live independently. Ultimately, many of us will decide that we would be more comfortable in our own home - adapting our house to suit our needs and making it easier to get around with accommodating furniture such as rise and recline chairs.
Now it seems that mortgage lenders are responding to our wish to stay in our own surroundings, with Halifax and Nationwide Building Society upping their mortgage borrowing age limits beyond retirement age.
The increased borrowing age comes in response to changing demographics, as people live for longer and employment habits see many of us working later into life.
Lenders have been reluctant to offer mortgages into retirement in the past, but now the general retirement age is shifting from 65 towards 70 and the state pension age for men and women will rise to 67 by 2028. This means that people are able to make repayments supported by their income for longer and will make these loans more affordable for the older borrower.
Halifax has recently announced that it will raise its maximum mortgage borrowing age to 80, while Nationwide made a similar decision just days later offering pensioners the same deal and allowing borrowers to pay this off over five years by age 85.
Nationwide has said it will grant mortgages of up £150,000 to its older borrowers, but, as is the case with Halifax, borrowing in your later years will require proof that your pension will allow for repayments or that your retirement income can support the loan. Applicants beyond retirement age must also verify that the loan will be no more than the equivalent of 60% of their property’s value.
Henry Jordan, Nationwide’s head of mortgages, explains: “We are taking a series of steps to meet a growing demand from customers to be able to borrow in later life. These customers are often asset rich, with significant equity in their home, and they wish to have the flexibility to borrow against it.
“Access to the mainstream market has been a challenge for older customers, resulting in their needs going unfulfilled. This measure helps to address these needs in a prudent, controlled manner.”