Today, we try to answer all your questions about age restrictions when applying for a remortgage/mortgage in England and Wales. Is there such a thing as an age limit for remortgaging, you might be asking? Are you aged over 60 and thinking of remortgaging? What are your options and what do you need to bear in mind before applying?
People in the UK are living longer. By 2030, statistics show that there will be close to 10 million more people aged 65 and over than in 2019.
Yet the birth rate is dropping, the Office for National statistics shows. The birth rate decreased to 11.1 live births per 1,000 population in 2018. Compare that to the high of 20.5 in 1947.
Are Mortgage Lenders Adapting to Our Ageing Society?
Today, we’re not just living longer. We’re working, retiring and spending money for longer.
Does this mean lenders are more flexible about lending to older borrowers? The good news is that they are.
The Financial Conduct Authority has taken a lead on this. It is now recognising today’s new realities and is relaxing affordability requirements for lending to older borrowers.
The Council of Mortgage Lenders (CML) says: “For a progressively longer-living population, 60 may be the new 50, if not the new 40. A natural part of this welcome progression is that there will necessarily be more and more of the mortgaged population in this “younger older” age bracket. And they will want to continue to access mortgage credit for a variety of reasons.”
Moneyfacts agrees. It says: “Several lenders have increased the maximum age that they will consider a mortgage against. No doubt recognising the growing number of over-55s who still need access to the mortgage market. Together, this would seem to indicate that the market is reacting to the changing needs of older customers. And especially those who are considering moving or remortgaging later in life.”
Many older borrowers are usually in a good position to remortgage. The CML reports that by the age of 60,the average mortgage holder has a debt of £90,000 but free equity of almost £150,000.
Loan-to-value (LTV) is a key consideration for mortgage lenders. So this puts many older borrowers at an advantage.
Lenders are bound by the Affordability Rules imposed by the Financial Conduct Authority (FCA). But these now require that firms take “a prudent and proportionate” approach to assessing retirement income.
What are the Age Cut-offs for Remortgaging?
There is no maximum age for applying for a remortgage.
However, most lenders have their own age limits:
- Taking out a remortgage: the maximum age varies widely from 65 to 80
- Fixing a remortgaging term end: the maximum age varies widely from 70 to 85
As with all lending, you are more likely to be accepted if you have a strong credit history. It’s also important that your income (either from earnings or your pension) is enough to cover your remortgage repayments.
A qualified mortgage advisor will have access to the best deals for people in your financial situation. He or she may well be able to offer you better choices than you can find online too.
Do you need help from a remortgaging advisor who’ll sit down with you to answer all of your questions and walk you through the process? To have an informal talk about your options, we’ll give you personalised, impartial advice on your remortgage if you would like to contact us here.