Many older homeowners have struggled to remortgage their properties in recent years, thanks to restrictive affordability measures introduced by mortgage providers to reduce risk.
The measures came into place following the financial crisis of 2007/2008, with many lenders lowering the maximum age allowed at the end of a mortgage term, making it difficult for older people to purchase a home or remortgage an existing deal.
Reassuringly, research suggests that some lenders are beginning to relax their criteria and embrace a more understanding approach to lending.
Research from Moneyfacts.co.uk reveals that the number of mortgages permitted to end when borrowers are aged between 80 and 84-years-old has risen dramatically in recent years, increasing from zero in 2014 to 1,078 products today.
In contrast, the number of mortgage products that require the borrower to be under the age of 69 when the deal ends has reduced from 923 products to just 18 over the same period.
In February 2014, 52% of all available mortgages were permitted to mature when the borrower was 75-years-old or above, compared to 72% now.
These are reassuring statistics, particularly when we take into account changes to society and longevity. Due to rising housing costs compared to largely stagnant wages, people are buying their first homes later than ever before. And when we team this with the fact that people are living longer lives, it’s clear that both new buyers and existing homeowners need access to mortgage products that will cover them in later life.
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.”
