Now your mortgage can last till you’re 80!
Halifax raises loan age limit
MIDDLE-AGED borrowers turned down for a mortgage because they were ‘too old’ have been given a lifeline.
Halifax, Britain’s biggest mortgage lender, is increasing its upper limit for customers from 75 to 80 after claims of age discrimination against the industry.
This is the maximum age borrowers can be when their mortgage term ends, not how old they are when they take out the mortgage.
Previously, the cut-off age to apply for a 25-year mortgage was 50 – even for wealthier customers who could easily afford to meet their repayments in retirement.
The change, which will come into force on Monday, means a 55-yearold will be able to take out a 25-year mortgage as long as they prove they can afford the repayments.
Last night, experts hailed Halifax’s new policy as a move towards a ‘more common-sense approach’ to borrowing into retirement.
Tougher affordability checks introduced in April 2014 have made it more difficult for many middle-aged and older people to get a mortgage.
Banks have been criticised for going too far when interpreting the rules because they fear falling foul of regulators. This has led to lenders turning down applicants who are likely to be making repayments in retirement when their incomes are lower.
There are a range of reasons why borrowers in their mid-fifties would apply for a mortgage – including downsizing, and freeing up equity to provide their children with money to get on the property ladder.
But t he ‘ computer says no’ approach has even led to homebuyers in their forties being turned down because they are ‘ too old’. Those forced to take out shorter loans face steeper mortgage repayments.
Barclays, Royal Bank of Scotland and NatWest all have an upper age limit on mortgages of 70.
The problem has been exacerbated by soaring house prices, which mean many people cannot afford to buy their first home until they are in their thirties or forties.
But David Hollingworth, from mortgage broker London and Country, said the move will put pressure on other banks to follow suit.
He said: ‘Hopefully this is a move towards a more common- sense approach to older borrowers and those who can prove they can fund a mortgage in later life.’
A Halifax spokesman said: ‘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.’