Lenders are increasingly concerned as to how mortgages are going to be repaid, and have particular worries about those borrowers taking on interest-only mortgages who don’t have any plans in place to pay off the loan. It is harder for older applicants to get a mortgage with many lenders insisting the loan is paid off by the age of 65 or 70, depending on their criteria.
Increasingly since the mortgage market review was introduced, many lenders are using 65 as the applicant’s retirement age which makes little sense when the state retirement age is rising and most people will work on beyond this age.
Given that the average age of a first-time buyer is their mid-30s, by the time many have saved up for a deposit there is not enough time to pay the mortgage back by the time they reach retirement age. Stretching the term to reduce the payments and help with affordability is not an option either.
Some lenders are more flexible than others with regard to when a mortgage is paid off so if you are in an occupation where you are intending to work until you are 70, some lenders will consider this. Contact us for more information.