Enness was recently featured in the Telegraph having secured a mortgage for an 88 year old client. Discussing the way that banks are so often turning away older applicants, we have since experienced a flurry of enquiries on how to get a mortgage over 65; this appears to be a very topical problem.
It is no secret that the Mortgage Market Review in April 2014 introduced legislation which affected nearly all borrowers, as the majority of high street lenders were forced to practise stricter lending criteria. Tough new rules stemmed largely from the wider market, as easy-lending became partially blamed for the financial crisis, with many lenders reducing the age they would lend to by imposing a maximum age (at the end of a mortgage term) of 70 to 75.
In hindsight, it seems lenders were tightening their belts even before the introduction of firmer rules in response to the economic crash, and consequently, the mortgage market has become a tricky terrain for older borrowers to manoeuvre to try to meet rigid tick-box criteria. Even still, be reassured that getting a mortgage over the age of 65 is definitely still possible…
One focus of the Mortgage Market Review was lending into retirement, however, this did not state that lending could not be made, but rather that both initial and ongoing affordability was crucial. Because of this, you may have to work harder to prove your affordability and reveal all details of your income and expenses to a prospective lender, but this is not an unusual request for any borrower in today’s climate.
Tougher lending may have forced banks to become more responsible, yet restricting client access is short-sighted and often unclear. Many high street lenders have been cracking down -even on middle-aged borrowers applying for a term which runs past state retirement age – due to the risk of a borrower being unable to service the debt.
Essentially, this is regarded as a growing problem as many people now step onto the property ladder later in life and work beyond the state retirement age. This means many could be missing out of some of the best deals available on the market or be prevented from remortgaging to cheaper rates.
Overall, it is up to the lender to interpret the rules and implement them as they feel most appropriate (no maximum age has actually been prescribed by the regulator), which means that thankfully, you can still find the lending you know you can afford.
If perhaps you are looking for a short term loan or bridging loan over the age of 65, high street lenders may shy away from your application if they believe you intend to use it as a very short term facility. Private Banks and smaller building societies, however, will take a more personal, holistic approach and welcome all borrowers with a client-focused, case by case outlook.
That’s why a private bank or building society can be the best option – and where we can help.
The key factor when applying for a mortgage over the age of 65, is for applicants to prove that they have enough pension or other investment income to service the debt. Islay Robinson, CEO of high net worth mortgage specialists Enness Private Clients, says: “If you can demonstrate that your retirement income from pensions or property is sufficient, obtaining a mortgage later in life should be some of the safest lendings of all. After all, you can’t get sacked from retirement.”
At Enness, we understand how frustrating it can be to be denied a mortgage purely based on your age, rather than your affordability and personal circumstance. We are strong believers in a client-centric financial services and ensure to work with lenders who will make local decisions rather than those based on restrictive rules and regulations.
We are proud to work with every type of lender across the market and are confident in our ability to find the best solution for our clients and present a case in the most appropriate and effective way, whatever their situation may be.