Mortgage Market: Is It Fair on the Older Generation?

The mortgage landscape has been through a whirlwind of changes recently. We’ve seen the chaos of the pandemic, the crunch of the cost-of-living crisis, the bite of high inflation, and the soar of interest rates. There’s been plenty of chatter about the impact on fresh-faced first-time buyers and the struggles of “second steppers” looking to climb the property ladder. But one group often left out of the limelight? Older homeowners.

Is Age Just a Number in the Housing Market?

MortgageIntroducer talked to some experts, and Scott Taylor-Barr, a financial adviser at Barnsdale Financial Management, tells it like it is: when it comes to getting a mortgage or insurance, it’s all about risk. And yes, that can feel a bit discriminatory. Underwriters—those folks who decide if you’re a safe bet for a loan—have a tough job. They have to figure out if an older borrower can keep up with payments over the long haul, considering things like health and job security.

Take two different careers: a barrister might be able to work and earn well into their silver years, while a bricklayer might have to hang up their trowel earlier. Lenders don’t want the bad PR of kicking an 80-year-old out of their home, so they’re extra careful with their decisions.

What About the Retirement Gold?

Kundan Bhaduri, a landlord at The Kushman Group, points out that when older folks retire, they’re not just sitting on their porch counting pigeons. They’ve often got a treasure trove of savings, investments, and retirement income that some lenders just shrug off. “Age-based discrimination,” Bhaduri calls it, urging lenders to get with the times and look at the whole financial picture, not just the date on the birth certificate.

New Horizons for the Older Borrowers

Elliot Cotterell, from Windsor Hill Mortgages, has seen a shift. Lenders are waking up to the fact that more people are working well past the traditional retirement age. They’re getting creative, offering mortgages that don’t say sayonara at 68, stretching terms up to 75 or even the big eight-oh for some.

There’s a buffet of options now: retirement interest-only mortgages, equity release schemes, and home reversion plans. They’re even looking beyond the usual payback routes, considering things like downsizing, pension income, and tapping into pension pots.

A Changing Tide on the High Street

And it’s not just the niche lenders shaking things up. Kirsty Wells from Blueprint Mortgages & Protection sees the big banks loosening up too, with some letting borrowers use their earned income until they’re 75. She’s been in the trenches, getting mortgages sorted for clients in their 50s and 60s, and she’s telling us there’s hope—and options.

For those in the autumn years of life looking to navigate this evolving mortgage maze, Wells’s advice is to partner up with a mortgage adviser. They’re the ones who can dig deep, tailor the search, and find the best fit for each borrower’s unique situation.

Bottom Line

The mortgage market’s doors are opening wider for older borrowers. It might not be perfect, but change is afoot, and it’s looking a little fairer for those who’ve been around the block a few times. Whether you’re looking to settle into your golden years in a new home or you’re just trying to shake up your financial portfolio, there’s room at the table. So, don’t let the number of candles on your birthday cake hold you back from exploring your mortgage options.