Clampdown on home loans hits pensioners

Following the introduction of stricter mortgage lending rules, over-65s are finding it difficult to obtain mortgages or even move to new mortgage deals.

The number of mortgages approved for pensioners, dropped to 8,000 in 2014 in comparison to 9,000 approvals in 2013. The value of loans given out dropped to £880 million in 2014, compared to the previous year’s figure of £960 million. According to experts, older people who were being refused loans were being forced to stay on more expensive deals or even unable to move to a new home.

Data released by the Council of Mortgage Lenders shows that the number of new mortgages to those aged over 65 had reduced by 11%, although the figures don’t include lifetime mortgages. New mortgage regulations were introduced in April 2014 to make sure that lenders encourage responsible lending and carry out checks to make sure the loans are affordable. For some lenders, this means insisting that borrowers have paid off the debt before the age of 70 or 75, which makes it harder for some people to obtain a 25 year mortgage, whether they can pay or not.

Experts are asking lenders to be a little more flexible, taking into consideration that more people are still working in their 70s, the state pension age has increased and life expectancy has increased. Mortgage advisers who have received comprehensive CeMAP training have the required knowledge of various types of mortgage and will usually be able to offer the best advice for people of all ages.



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