UK high street lenders Halifax and Nationwide have raised their mortgage application age limits. Reflecting the changes to the UK’s population which is aging and also the level of equity many older home-owners have in their property - built up during decades of rising house prices - the increase doesn’t mean older home-owners will be saddled with debt they cannot repay, the lenders warned.
Halifax has increased the upper mortgage application age-limit to 80 from 75, which came into force from May 9th. Meanwhile, under rule changes that will come into effect from July this year, Nationwide has raised its upper mortgage age-limit to 85 from 75.
The news was unveiled in a note to brokers. A Halifax spokeswoman told Mortgage Strategy: “As demographics and working habits continue to change, we continually review our products and policies to ensure they reflect the evolving needs of our customers, including those who wish to continue working longer.”
Nationwide, meanwhile, issued a press release stating its news. “We are taking a series of steps to meet a growing demand from customers to be able to borrow in later life,” Nationwide’s head of mortgages Henry Jordan said in the note. “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.”
One change that this increased mortgage application age-limit likely reflects, is the rules that came into play in 2015, allowing retirees greater pension freedoms and the ability to make more of their own decisions over how and where their pensions are invested. Much debate stemmed from that over whether or not there would be an increase in the number of pension-aged landlords seeking to grow their pot and receive an additional, or potentially larger income from their pensions.
There has been little evidence so far to suggest there has been a particular increase in older landlords or property investors. However, with these mortgage limit age increases from major lenders, that could change.
The Council of Mortgage Lenders seemed happy with the news, with spokesman Bernard Clarke telling Mortgage Strategy: “We have been working to address regulatory, funding and market barriers that discourage all types of lenders from retirement borrowing.”
While those age increase may give a boost to potential older borrowers, there’s a chance any rise won’t be too large. That’s because there were already a number of existing mortgage lenders who have no upper mortgage age-limit.
A report in May by the Building Society Association shows there are 11 building societies with no age limit on mortgages.
Paul Broadhead, head of mortgage policy at the BSA said: “We are seeing innovation in the approach to underwriting and the development of processes better tailored to the specific circumstances of older borrowers.”