As a result of the financial crisis, we are all aware that lenders introduced many more strict rules and criteria to reduce their exposure to risk. Be it an unsecured loan, credit card or mortgage, or if you were a younger or older borrower if affected us all. However it now looks as though at least one element of those strict criteria is being relaxed, which means that it should be easier for those looking to remortgage or take on a mortgage in later life.
Research by Moneyfacts.co.uk showed that the number of mortgage products available to borrowers in the 80-84years category has increased dramatically. There were 0 in 2014 and today there are 1078. Furthermore the number of products available to borrowers aged between 65-69 has dramatically decreased over the same period from 923 to 18, again indicating a more relaxed approach by the lenders when it comes to maximum age.)
The softening of the maximum mortgage end age appears to be widespread: the data shows that in February 2014, 52% of all available mortgages were permitted to mature when the borrower was 75 years old and over, whereas today, this figure stands at 72%.
Given that we are an ageing population, and that people are living and working longer then it can only be a good thing. There has also been an increase in first time buyers at 40+years, so it makes sense for the lenders to relax the maximum age requirement.
Darren Cook, finance expert at Moneyfacts.co.uk said “Over the past five years, mortgage providers have become far more accommodating to borrowers who wish, 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 this month. With this trend looking to continue as many of us retire later, older borrowers will welcome this extra choice.”
Perhaps other financial products will follow suit and although not necessarily relaxing of a maximum age in relation to unsecured loans for example, any relaxing of the strict criteria would be welcome by everyone.