Older borrowers hit by tougher mortgage rules

Older people wanting to obtain mortgages could find it more difficult in the future due to new rules, which have recently been introduced by some of the UK’s biggest mortgage providers. Nationwide and Halifax recently brought in new regulations for people who want to extend their mortgages into retirement.

Even before these rules were introduced older borrowers, who may only be in their 40s, have been finding it increasingly tricky to secure the mortgage deals they need – even if they have steady, guaranteed incomes and large deposits.

The UK’s two big mortgage lenders have decided to take the state pension age as their official retirement point, unless a person’s anticipated retirement age is lower, and this could be disadvantageous for those who plan to work into their 70s. Although borrowers’ current incomes are taken into account, the new rules say they must also have a private pension of some kind, and other assets such as savings or property will be disregarded.

As the average age of those purchasing a home for the first time has been gradually increasing, and more people have plans to work into their 70s or beyond, the failure of lenders to allow mortgages to run past the age of 70 or 75 is becoming more of a problem, and the new rules have made the situation worse.

More professionals are needed to help older people navigate the choppy waters of the mortgage market and, fortunately, CeMAP courses in Scotland, Wales and England are enabling many people to become qualified mortgage advisers.



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