With the UK population living longer and working later in life, it comes as no surprise that our mortgage requirements are also beginning to change. The mortgage market however is lagging behind somewhat, and as a result older borrowers are still finding themselves coming up against the maximum age criteria applied by most of the main high street lenders.
Smaller building societies and specialist lenders often offer a more flexible approach to underwriting, with some scrapping their maximum lending age recently. For those with very small mortgages who simply wish to extend the loan or move it to a new property without changing lender, the options can be very limited.
The Financial Times reported this weekend that wealthy borrowers are another group finding it difficult to secure the best rates on the market. The Mortgage Market Review carried out in 2014 by the Financial Conduct Authority (FCA) provided an exemption to the usual affordability rules for ‘high net worth’ individuals, but many lenders are failing to use this, due in part to their automated underwriting systems. Many therefore are turning to private banks for help, but missing out on the most competitive rates.
For others, the good news is that competition among lenders continues to increase. As the Observer highlighted, the weekend marked the 7th anniversary of the Bank of England cutting its rate to 0.50%, and deals remain exceptionally low. Mortgage brokers warned against complacency however, urging borrowers to review their options now and cut their rate if possible, to prepare for a time when rates do begin to rise.
What the papers said about lending criteria