More over 40s likely to struggle for a mortgage

March 2, 2016 by Brendan

Lenders

Mortgage brokers have issued a warning that borrowers over the age of 40 may face more difficulties securing a mortgage.

Although lenders recently pledged to relax rules for older borrowers, the results of a new survey indicate that this may not be the case. The survey conducted by Nottingham Building Society revealed that 40% of brokers have reported people above the age of 40 are struggling for approval by lenders. Over a third of brokers surveyed expect the problem to get worse this year.

According to research by the Halifax, the average age of a first time buyer is now 31, with many mortgage terms lasting between 25 and 30 years. This means that a first time buyer aged 31 could face paying their mortgage until the age of 61. First time buyers who are aged 40 or over, may struggle to obtain a mortgage for a longer term.

During the last two years, 17% of people who were refused a re-mortgage or mortgage say that their age was a significant factor, while age is a factor for 21% of those aged between 45 and 54. Around a quarter of those whose age was a factor in being refused a mortgage, said that they weren’t able to borrow over a long enough term, while others say that they were classed as too old.

Older borrowers often have a guaranteed state pension and a private pension which may be a more secure income than a salary. Mortgage advisers who have trained for CeMAP will be able to help older borrowers locate the best solution for their circumstances.