Two Major Mortgage Lenders Increase Age Limit For Borrowers

Experts Say Taking Advice Is Essential For Older House Buyers


Kate Rawlings, Press Officer | 0114 274 4238

As two major lenders raise their age limit for mortgage borrowers to 80 and 85, conveyancing experts say it is imperative that house buyers take proper advice to ensure they will be able to meet repayments after retirement.

Last week Britain’s biggest mortgage lender Halifax announced that they were increasing their age limit to 80.

This week Nationwide followed suit by announcing it would raise its age limit for people paying off mortgages by 10 years to 85, from July.

It is the latest side effect of rising house prices and increasing financial pressures on buyers.

The move comes in the wake of calls for the industry to do more to help older buyers after tougher mortgage checks which were introduced following the financial crisis, have made it increasingly difficult for middle-aged people to get a home loan.

The UK has around 12 million people aged over 65 and a growing number of lenders appear to be beginning to target this market, although most mainstream lenders still have lower age limits.

Workers are no longer compelled to retire at the age of 65 and the state pension age will rise to 67 for both men and women between 2026 and 2028.

The new age limit of 85 from Nationwide means a 60-year-old could take out a 25-year mortgage on the provision that they can prove they can afford the repayments.

The building society said the new age limit would be available to existing customers for all its standard mortgages, but the maximum loan size would be £150,000, and could be no greater than 60% of the property value.

Results from a recent survey by Halifax revealed that one in three 20- to 45-year-olds expected to be working beyond their retirement age to pay off their mortgage.

Expert Opinion
It’s a positive step that mortgage lenders are taking note of the ageing population, new rules over pensions and a rise in ‘silver splitters’ who need to buy new homes, later in life.

With this in mind older borrowers need to make sure that they have a well thought out and advised financial plan in place to ensure they can meet the repayments, after they have stopped receiving a regular income from employment.

The most important advice when buying a house, no matter what age you are, is to take full advice to ensure that proper planning is done, including ensuring you have a valid Will and Power of Attorney in place.
Helen Hutchison, Associate