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Lenders relax maximum mortgage age

Lenders relax maximum mortgage age

Category: Mortgages
Author: Leanne Macardle
Date: 29/01/2019

If you're an older homeowner, the last few years may have been challenging if you were looking to remortgage your property. This is because, as a direct result of the financial crisis, mortgage providers introduced several restrictive measures to reduce their exposure to risk, one of which was lowering the maximum age allowed at the end of the mortgage term. Happily, however, it looks as though this restriction is being scaled back, which should make it easier for those looking to take out a mortgage in later life.

Mortgage boost for older borrowers

The latest research from Moneyfacts.co.uk reveals that the number of mortgages permitted to end when borrowers are aged between 80 and 84-years-old has increased dramatically in recent years, rising from zero in 2014 to 1,078 products today. Meanwhile, the number of products that allow a borrower to be aged between 65 and 69 when it ends has reduced from 923 products to 18 over the same period, perhaps as more providers are allowing borrowers to be older at the end of the mortgage term.

Maximum age at end of mortgage – lending criteria (Number of mortgages available)


Date

65-69 years

70-74 years

75-79 years

80-84 years

85+ years

Total number of mortgages available


Feb-14


923


638


1,645


0


33


3,239


Feb-16


188


735


2,104


50


72


3,653


Feb-18


19


618


1,499


885


298


3,845


Today


18


608


1,822


1,078


263


4,419


Source: Moneyfacts.co.uk

Happily, the softening of the maximum mortgage end age appears to be widespread: the data shows that in February 2014, 52% of all available mortgages were permitted to mature when the borrower was 75 years old and over, whereas today, this figure stands at 72%.

More options

Given the rising longevity among the population at large and the increased level of working among those past traditional retirement age, not to mention the rising age of first-time buyers – buying a first home at age 40+ is becoming increasingly common, as are longer mortgage terms, which makes mortgages ending at age 65 seem increasingly unrealistic – it's little wonder that attitudes are changing, which can only be a good thing for older borrowers.

"Over the past five years, mortgage providers have become far more accommodating to borrowers who wish, or may have no alternative but to extend their mortgage term well past the official pension age," said Darren Cook, finance expert at Moneyfacts.co.uk. "In particular, the scaling back of strict criteria around the maximum age at the end of a mortgage must be a welcome relief for those borrowers who may have reached the end of their interest-only mortgage at age 65 and have had few options available to turn to, or for those looking to release equity or purchase a retirement property.

"The scrapping of the Default Retirement Age in 2011 now means that the official pension age and retirement age are no longer one and the same, and employees can choose to work beyond state pension age for reasons other than financial need.

"Lenders are clearly reacting to this, even at the highest tier, with those who will be aged 85 or over at the end of a mortgage now having eight times as many deals to choose from than they did five years ago, rising from 33 products in February 2014 to 263 this month. With this trend looking to continue as many of us retire later, older borrowers will welcome this extra choice."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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