18 Feb 2019
The last few years have been challenging for older homeowners looking to remortgage.
Following the worldwide financial crisis, mortgage providers introduced measures to reduce their exposure to risk.
One of them was lowering the maximum age a borrower could be at the end of their mortgage term.
However, there is good news from financial services company Moneyfacts, which now reports that this restriction is being scaled back – making it easier for those looking to take out a mortgage in later life.
Latest research from Moneyfacts reveals that number of mortgages permitted to end when borrowers are aged between 80 and 84 has increased dramatically – rising from zero five years ago to 1,078 products today.
It added that the softening of the maximum mortgage end age appears to be widespread – in February 2014, 52% of all available mortgages were permitted to mature when the borrower was 75 and over, whereas today this figure stands at 72%.
Given the rising longevity among the population at large and the increased level of working among those past traditional retirement age, not to mention the rising age of first-time buyers – buying a first home at age 40-plus is becoming increasingly common, as are longer mortgage terms, which makes mortgages ending at age 65 seem increasingly unrealistic – it's little wonder that attitudes are changing, which can only be a good thing for older borrowers.
Darren Cook, a finance expert at Moneyfacts, said: “Over the past five years, mortgage providers have become far more accommodating to borrowers who wish to or may have no alternative but to extend their mortgage term well past the official pension age.
"In particular, the scaling back of strict criteria around the maximum age at the end of a mortgage must be a welcome relief for those borrowers who may have reached the end of their interest-only mortgage at age 65 and have had few options available to turn to, or for those looking to release equity or purchase a retirement property.
"The scrapping of the Default Retirement Age in 2011 now means that the official pension age and retirement age are no longer one and the same, and employees can choose to work beyond state pension age for reasons other than financial need.
"Lenders are clearly reacting to this, even at the highest tier, with those who will be aged 85 or over at the end of a mortgage now having eight times as many deals to choose from than they did five years ago – rising from 33 products in February 2014 to 263 now.
“With this trend looking to continue as many of us retire later, older borrowers will welcome this extra choice."
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