Older borrowers face mortgage challenges

More than a third of new mortgages being taken out today will extend beyond the borrower’s 65th birthday but lending to this age group is lagging far behind, the Council of Mortgage Lenders (CML) has revealed.

Figures released at a CML conference in June showed that almost 35 per cent of new loans were not expected to be fully repaid until the borrower has passed the age of 65, although around 80 per cent of these were due to be repaid before the borrower turned 70.

However, the value of mortgages – excluding lifetime mortgages taken out by borrowers aged over 65, which declined to around £1 billion last year – accounted for only 0.5 per cent of total annual advances of more than £203 billion.

Meanwhile, borrowing in retirement is on a much smaller scale and has been on a downward trend since 2007.

Over-50s specialist Saga said: “These latest figures mask the very real issue that many older homeowners are facing.

“Whilst a lucky few may have been able to take out a mortgage to move home at an older age, we’re still hearing from people who are stuck in uncompetitive mortgages who are unable to move to a better deal simply because of an arbitrary age limit.

“It’s simply wrong that on the one hand people are having to adapt their plans to work for longer, but on the other hand the mortgage lenders are failing to adapt to this significant economic shift. Lending decisions should not be based on somebody celebrating a birthday; it should be about an individual’s ability to pay.”