In working out what they think a borrower can afford, lenders will consider the borrowers’ ages, since, at some future point, their income may be reduced or stopped altogether. 10 years ago most lenders set a limit of age 65 as the maximum age to which they would lend. This made it difficult for older people to get a long enough mortgage term to make the payments affordable. In recent years, however, this maximum age has moved to 70 for most lenders and even 75 and above for others – depending on the nature of the income the borrowers have.
There is an exception where age can be, in fact, an advantage in borrowing. What are called “Lifetime Mortgages” rely only on the ages of the borrowers and the value of the property. It is only
available for those aged 55 or older and who have considerable value in the property as the level of
borrowing even for the oldest borrowers is capped at about 50% of the property value. For those
stuck with an Interest-Only mortgage coming to an end, a Lifetime Mortgage can provide a useful
exit strategy. For example, a person aged 60 with a property worth £200,000 could get a Lifetime
Mortgage of up to about 34%, i.e. £68,000. One aged 65 could get up to about 38% of the property
value, i.e. £76,000 and a person aged 75 could get up to about 49% of the value, i.e. £98,000 on a
property valued at £200,000. Do contact us if you would like to discuss the options available to you.
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