Recent alterations to the mortgage market were expected to impact young people the most, especially first time buyers and those who will struggle to get together a deposit or prove that they are earning enough to keep up with the rate of inflation. It is now thought that older people are also being affected.
Those aged over forty may run into trouble when trying to acquire a mortgage because of the recent regulations that came in after the Mortgage Market Review which has made lenders more cautious. They are eager to have mortgage payments repaid by the time the borrower retires, so that pensions are not being relied on to make the repayments. Halifax and Nationwide are thought to be amongst those cracking down.
“In theory, most of [the lenders] say 70 to 75, but in practice, some will apply an even earlier age [as the upper limit for borrowing] unless people can demonstrate that they’ve got a good pension income – which, of course, most people in their forties can’t,” said Ray Boulger, from John Charcol the mortgage broker.
Other borrowers aren’t being as strict, but the larger banks seem intent on covering themselves. Older people are far more high risk to them if they are set to retire before the end of the mortgage term. A decent state pension may be enough to sway the banks into lending to individuals, but they are not obliged to lend out to anyone.
