23rd February 2016
Two out of five mortgage brokers have seen a rise in over-40s struggling for home loans, as age restrictions mean some customers are unable to borrow for as long as they need to.
The study by Nottingham Building Society found among mortgage brokers suggests problems will continue this year, as more than a third (34%) expect the number of over-40s struggling to secure home loan deals will rise again in 2016.
Among customers who have been turned down for mortgages or remortgages in the past two year, around 17% say their age was a major reason. That rises to 21% among those aged 45 to 54.
Around one in four of those whose age counted against them say they were not able to borrow for long enough while the rest were turned away because either they or their partner were too old.
The difficulties stem from the requirement for lenders to verify income, which may drop significantly after retirement.
The Council of Mortgage Lenders and Building Societies Association are both working with members on the issue of lending into retirement and some have increased their maximum ages.
Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services, part of the building society, says: “It is baffling for people in their early 40s to be told they are too old to have a mortgage and particularly so when the average age of first-time buyers is rising which means some could even be first-time buyers.
“There is no doubt creditworthy customers are being rejected and some are facing restrictions on their choice of mortgages.
“However there are options out there for older borrowers and the key to ensuring they get the most appropriate mortgage is to search the whole market. If your existing lender is restricted on what it can do there are other options.”