For mortgage lending
Mortgage brokers have recently criticised banks for their attitude towards lending to older borrowers. Figures showed than half of all building societies had maximum age limits over 80, yet banks are lagging behind and restricting options for retirees. Halifax has this week announced they have increased their maximum age to cater for growing demand.
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Halifax raises their maximum age limit to 80
From 9 May 2016, Halifax increased their maximum age cap to 80, up from 75, applying to all existing mortgages as well as new deals, further advances and transfers. The rules continue to apply to the oldest applicant for a joint mortgage.
This has come in line with several other lenders also assessing their age restrictions, and it’s the second recent change by Halifax to it’s “lending into retirement” policy.
The lender had already relaxed it’s treatment of what classified as “income” for affordability testing of older borrowers. Halifax previously used earned income only up to the state pension age, which currently stands at 65 for men and 63 for women. After this, pensions and retirement income were used for affordability testing. Since 22 April 2016, the rules relaxed to factor-in earned income up to age 70, if required for the application.
Halifax said its change today was a response to changing demographics, with people living and working for longer.
“As demographics and working habits continue to change, we continually review our products and policies to ensure they reflect the evolving needs of our customers, including those who wish to continue working longer.” Halifax spokeswoman.
Other lenders – how they compare
HSBC, Santander and Virgin continue with an age cap of 75. Barclays and RBS have a maximum age limit of 70, at present.
Metro Bank currently has no age cap on residential mortgage lending, however standard affordability tests still apply.
Ten members of The Building Societies Association do not have any age cap for lending either, and 22 building societies now lend up to 80 or 85 years old. As more lenders loosen their criteria, those left behind are expected to be the exception, as the demand for borrowing for retirees continues to increase.
Retired or approaching retirement? Speak with Chris
Dental & Medical Financial Services are specialist mortgage advisers. Contact Chris for a free, no obligation appraisal and to see if there are savings to be made.
Tel: 01403 780 770