Two of the UK's largest high street lenders have upped the maximum age limit for mortgages, opening up borrowing options for those aged up to 85.
Nationwide announced today it has increased its age limit by ten years to 85 from July, while Halifax has today increased its age by five years to 80. The changes mean that with Nationwide, a borrower aged 60 could take out at a standard 25-year mortgage, as long as they are able to prove they can afford the repayments in retirement, the BBC notes.
Lending will still be somewhat restricted, with Nationwide setting the maximum loan size for these older borrowers at £150,000 and 60 per cent of the property value.
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Halifax has not indicated any specific similar restrictions, but The Guardian says it emphasised that "any borrowing beyond retirement age will require proof of retirement income".
There have been repeated concerns raised over the issue as house prices surge and more people set themselves to work well beyond retirement age. In particular, complaints have come over the plight of existing older homeowners who are unable to re-mortgage to a cheaper deal because of age restrictions apparently designed to ensure affordability.
Some fringe lenders already cater to older borrowers, with Hodge Lifetime now offering loans of up to £500,000 at a maximum of 60 per cent of the property value for those aged up to 95. Regional building societies also often have higher age limits - Epsom-based National Counties building society will consider applicants up to age 89.
Most high street lenders remain wedded to lower age caps, however, with many blaming the tighter affordability tests under the Mortgage Market Review. These rules require banks to assess monthly income and spending and most banks are reticent to consider earnings after normal retirement age.
"Barclays and RBS have an age limit of 70 for their mortgages, while HSBC, Nationwide and Santander impose a cut-off at 75," says the Guardian.
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