Too old to get a mortgage at 40?

Experienced Independent Financial Advisors of Bishop’s Stortford Enable know that a roof over your head is a vital part of anyone’s financial planning.  Recently two of Britain’s biggest lenders, the Halifax and Nationwide, have introduced new rules for customers who want to borrow into their retirement. These mortgage lenders have made it more difficult for older borrowers to secure a mortgage by requiring them to prove their retirement income from the state pension age – regardless of whether they intend to work for longer.

A borrower’s state pension age of course depends on when they were born and it is rising gradually in line with life expectancy and is expected to extend beyond 70 eventually. Borrowers aged between 37 and 45 have a state pension age of 67 and for those aged 46 to 60 it is 66.

Securing a mortgage later in life is probably going to continue to be a growing problem. Currently many people have delayed buying a home because of soaring house prices and stagnant wages during the financial crisis. The average age of first-time buyers is currently about 30, up from 25 in the early Seventies but it is expected to keep on rising – some suggest it may reach about 40 by 2025.

Many firms, have stopped issuing interest-only loans, in some cases, the only option is to move to a repayment basis. If an older borrower is unable to extend the term of the mortgage past their state pension age, for example, monthly repayments could increase many times over, making the debt unaffordable. If you want help planning your options Enables IFA’s are happy to talk.

Despite his enthusiasm for technology and his belief it will fill the advice gap, Matthew feels it will never replace face-to-face advice. He says: “Technology is just a tool. There are all the things it can arguably do to make our job better – but it can’t pick up on the nuances of what people say to you and get behind what’s been said.” Enables IFA’s would agree.

Your home could be at risk if you do not keep up your mortgage repayments. 

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE