Both ends of the lending spectrum were covered in this weekend’s financial press, and in particular the criteria that is enabling different generations to either get onto the property ladder, or stay on it.
The Times reported on the increasing popularity of 35 or even 40 year mortgage terms amongst First-Time Buyers. Higher house prices have raised loan sizes significantly over the last few years, and some lenders are now responding by allowing buyers to spread their debt over a longer period of time.
Doing so results in lower, more affordable monthly payments, but experts warned that the overall cost of borrowing will be much higher over a longer term. Homeowners are advised to review their options as they go, overpaying where possible, or considering switching to a shorter term once they have a higher level of income, or have built up more equity in their home.
At the other end of the spectrum, the Guardian and Sunday Times both looked at the needs of older borrowers. The demand for later-life lending is on the increase, fuelled by a generation who are living and working for longer, as well as wanting to help their families. As experts pointed out, many older borrowers have steady incomes and well managed finances.
As a result a number of lenders have begun to increase their age limit for repayment, with some now allowing borrowers to hold a mortgage into their 90’s. Experts advised that interest rates could be higher than more mainstream products, and borrowers must also consider the implications of later-life lending before going ahead.
What the papers said about borrowers young and old