Historically, it has been difficult for older people to obtain a mortgage, but now many lenders are reviewing their upper age limit for borrowers.
In November 2015, The Guardian reported that Britain has 11.6 million people over the age of 65, many of whom are still earning an income and can afford mortgage payments. Paul Broadhead of the Building Societies Association recognises that lenders need to revise their lending policies for older people, and was quoted in the article as saying:
“The time is right to review lending policies … and to work closely with a range of organisations across different sectors to ensure lenders are equipped with the appropriate tools to respond to the rapidly changing demographics across the UK.”
Traditionally, people bought a house before they were 30 using a 20-to-25 year mortgage which could be paid off before they retired. A survey by the investment platform rplan.co.uk, published on Moneyfacts.co.uk in February 2016, found that 17% of people asked expected that they would be aged between 36 and 50 before they could afford to buy their first home. This means that their mortgage will not be repaid until after the age of 65.
Many high street banks are reluctant to lend to the elderly, but some building societies are offering mortgages to people up to their eighties. Many of these mortgages are remortgaging to release equity on their homes, but some elderly people are purchasing buy-to-let properties in order to gain extra income.
A residential or commercial mortgage broker can find the best mortgage deals for elderly borrowers.