Over Half Of Mortgages Are Available To Over 55s | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 19/06/2020

Of all residential mortgage deals available, over half are open to borrowers aged 55 or over at application and have a maximum age of 75 or above at end of the mortgage term.

Research carried out by Moneyfacts.co.uk found that there were currently 2,734 mortgage deals available in the market and of these, 1,541 are available to borrowers who are aged 55 or over and have a maximum age at end of the mortgage of at least 75. While this will be welcomed by older borrowers, just 147 of these mortgages are specifically marketed towards those past pension age, with just 147 deals available at a minimum age of 55.

Although later life borrowers have a range of choice when it comes to mortgages, those looking for deals that have a maximum age of 80 or over may be better off focusing on deals specifically aimed at later life borrowers. For example, in the three year fixed rate mortgage chart, HSBC currently offers a deal at 1.39% (3.1% APRC) fixed until 30 September 2023, but it has a maximum age of 80. Borrowers aged 55 or over and who looking for a deal that goes beyond the maximum age of 80 can get a later life mortgage from Tipton & Coseley Building Society that offers 2.95% (4.6% APRC) fixed until 30 June 2023, and this deal has a maximum age of 90.

Interest-only mortgages

As well as providing a higher maximum age limit, some later life mortgages provide the option of interest-only deals. When choosing a later life interest-only mortgage, borrowers should be aware that they will have to pay the mortgage off after an agreed time period. Alternatively, borrowers could consider a retirement interest-only mortgage (RIO), in which the mortgage is not repaid until it is sold after the borrower dies or goes into permanent long-term care.

Other later life borrowing options

Retired homeowners looking for an alternative form of borrowing can consider equity release, which will enable them to unlock wealth in their property. Homeowners considering this should be aware that equity release comes with risks and, although the loan does not have to be paid back until after the borrower dies or goes into long-term care, interest can accumulate, meaning it can significantly impact inheritance left behind.

Before taking on any type of mortgage in later life, borrowers should consider their options carefully and, if possible, speak to a financial adviser before making a decision. As Eleanor Williams, finance expert at Moneyfacts.co.uk, explains: “The mortgage market may have taken a couple of years to catch up with the Financial Conduct Authority’s (FCA) directive to meet the increasing demand for mortgage borrowing among older consumers, but it now seems things are moving in the right direction. Later life borrowers who traditionally have felt uncatered for now have more options open to them, such as the fact an increasing number of standard mortgage products are available over a 40-year term, RIOs becoming classed as standard mortgage products, and of course various methods of equity release. Individual circumstances and affordability will be paramount in ensuring the right route and product for is selected for each borrower, and therefore qualified, independent financial advice is vital for anyone considering their options.”


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