Getting a mortgage at over 50 shouldn’t be a problem

Never have we been further away from a pipe, slippers and getting intimately reacquainted with Heartbeat on ITV 4.

Statistics say we're living longer, retiring later and remaining wonderfully productive well into older age - just as the doctor and, indeed, the government ordered.

Yet there's one area when we might be considered "over the hill" in our 60s, 50s or even younger.

Some of Britain's biggest mortgage lenders are, according to recent media reports, cracking down on such "older" borrowers. Believe the headlines and customers in their late-40s who intend to work into their 70s are struggling to jump through lenders' hoops.

But is that really the case?

Helen Crowther-Dowey, a mortgage and protection consultant for Nottingham Mortgage Services and Nottingham Estate Agency, says some borrowers in their 50s and 60s are running into difficulties.

So-called "affordability" rules introduced earlier this year mean lenders have a legal duty to demonstrate customers can meet their monthly mortgage repayments - both now and in the future. Each lender has a slightly different interpretation of the rules.

If your mortgage will run into your "retirement" - but that date is 10 years or more away - your current income will probably be used to assess affordability. If your retirement is less then 10 years away, a lender is more likely to use your retirement income to calculate whether the loan is affordable.

"It is quite a confusing situation at the moment," says Helen.

Adding to this confusion is the government's incremental rising of the state pension "retirement" age - and whether we choose to work past that date.

Lots of us may have no intention of retiring on or before our state pension age; whether it's 65, 66 or 67. You may tell a lender you plan to carry on working until you are in your 70s. Whether the lender accepts that - particularly if you do a physically demanding job - is another matter.

"Lenders have things called probability checks," says Helen. "If you are a builder, for example, they may consider it unlikely that you will be capable of doing a heavy manual job at the age of 70.

"It is not a set thing. Different lenders take different views on mortgages that run into retirement. Some people are missing out. I had a customer with a standard variable rate (SVR) mortgage who wanted to take out a fixed-rate product with the same lender. She couldn't get it because of her age. Yet the fixed-rate deal was going to cost her less and she could have finished it earlier by overpaying."

There is a silver lining on this grey cloud.

You may have a reduced choice of mortgages (with shorter terms) as you get older, but there are plenty of products out there. Lots of lenders like older borrowers, says Helen. Older borrowers are probably in their own homes, they have equity which brings loan-to-value (LTV) ratios down and they have demonstrated their ability to pay a mortgage. All are big ticks in the plus column.

"You need to get good advice. That's the main thing," says Helen.

If you are over 50 and would like advice on your mortgage then talk to our advisers at your nearest branch or call our team of mortgage advisers on 0344 481 0013.


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