Buyers once constrained by a shorter mortgage term as they approached their mid to late 40’s are now able to take on a mortgage. This is based on earned income, with a term that will take them into their mid 70’s. Late starters, career changers and divorcees in their mid to late 40’s were once restricted by maximum mortgage terms of between 15 and 20 years. Now for those wanting a long term mortgage aged 40 plus, terms of 30 years are now available from a number of lenders taking borrowers into their 70’s.
Spreading payments over 30 years rather than 15 or 20 ultimately means lower monthly repayments for those starting over in their 40’s. Crucially this will often mean the difference between being accepted for a mortgage based on affordability or not.
When the credit crunch hit in 2008, banks and building societies got worried and started to impose strict rules on who could borrow and decided lending past the age of 65 was dangerous.
Age Limits Relaxed
Today age limits have been relaxed and lenders will allow borrowers to stretch the term of their lending into older age, also a reflection that our working lives have got longer.
“If you’re getting on the housing ladder later in life, changing career and needing to reduce mortgage repayments or separated and starting over, these relaxed age limits are good news” said Matthew Southey at Ask About Mortgages. “Being able to spread payments over a longer term makes buying a property affordable when otherwise it may have not have been and renting was the only option. Borrowers in their 40’s and early 50’s wanting to buy a more substantial family home or borrow more to do home improvements or extend can also benefit from the flexibility of a longer term”.
Many high street lenders will allow borrowers to take their mortgage term to the age of 75 based on earned income. One or two lenders even further meaning for those wanting a longer term mortgage aged 40 plus they are now available.
There are of course no guarantees that even though the age cap has been extended you’ll qualify. All lenders have their own criteria which you’ll need to meet but a good broker will have knowledge about the criteria of different lenders.
If you are wanting to stretch the mortgage even further (80+) extending into retirement this too is possible but will require an assessment of pension payments and investments. A broker will liaise with the lender on your behalf.
Your home maybe at risk if you do not keep up repayments on your mortgage.