You may be surprised to hear this, but life does not end at age 70! This is despite a majority of mortgage lenders requiring full repayment of their loans at this age. Normally, a high street lender will allow a mortgage term to last until the applicants usual retirement age. This used to be 65, officially it’s now 67, but the reality is it can be much later. As such, most lenders increased their maximum age at the end of mortgage maturity to age 70. However, we all know that people are working a lot longer now and repayment of such a large amount of money may not be possible in these restrictive conditions. So the option is to raise further finance to repay the original loan or sell the property. Thankfully, the first option is less onerous as it used to be. Many non household name lenders will look at lending to customers a lot later in life, assuming the customers can prove their continued ability to pay. This can take the maturity age up to age 80, 85 or even 90 and above. If the customer has a good amount of income, a good amount of equity in the property and can satisfy the lenders affordability requirements, then a lender should be happy to lend. This almost demands that you seek specialist advice.
There are a number of mortgages available to those over retirement age. We’re seeing a lot of first time buyers turn to the bank of Grandma and Granddad as the money well of Mum and Dad appears to be running a little dry! There are various ways in which the older generation are helping the first timers. Some are gifting deposits, to help them on to the property ladder. With most products, the larger the deposit, the lower the interest rate. Others have agreed to the placement of a collateral charge on the parents or grandparents property. This gives a lender more security and maybe a better credit risk rational to the deal, than originally might have been the case. In some cases the parents have joined in to provide additional income support and bolster the overall application. Whichever way required, always explore the options and have a conversation with a professional as there may just be an alternative way to do the deal.