Obtaining a mortgage beyond the age of 50 might seem hopeless to many but new research revealed more than 60 lenders offer products to older borrowers.
What Mortgage reports that in the last four years there has been significant increase in ‘later life’ products, which allow people in their 50s and beyond to secure a loan for a property, according to Ipswich Building Society.
Products which allow people to borrow beyond retirement age or retirement interest-only (RIO) mortgages are becoming more widely available.
But, it would appear, the borrowers who could potentially take advantage of this boom are not aware of what’s on offer.
In fact Ipswich said its research found more than half of over 50s it quizzed said they thought they had fewer mortgage providers available to them than younger applicants.
As many as 60% said they felt there were fewer actual mortgage products available to them and just under half said they were offered less favourable rates.
Richard Norrington, CEO at Ipswich Building Society, said: “The mortgage landscape for over 50s looks entirely different now compared to just a few years ago but as our research shows, that doesn’t necessarily mean people’s perceptions have kept up.
“Too many borrowers are still pleasantly surprised that they can get a mortgage after a certain age, rather than expecting this to be the norm.”
A ‘good risk’
Going forward, a range of factors means the age at which people need to borrow money to purchase a property is getting higher.
A recent report from the Office for National Statistics (ONS) suggested the number of older people in rented accommodation would rise as people struggled to get onto the property ladder in their 30’s and 40’s.
What’s more, many older people – even into their eighth decade – were choosing to continue to work.
Ipswich said, whether the older generations were working or retired, they would be likely to have steady income which meant they could represent a ‘good risk’ for lenders.
Norrington emphasised that borrowing into later life was not suitable for everyone but with more lenders offering products in this market the impact of these mortgages could be ‘profound’.
He added: “Older borrowers have complex needs, and are not all simply ‘down-sizers’.
“Although some are looking for smaller, easy-to-manage properties near to amenities now their children have flown the nest, being older doesn’t mean they stop striving for more, which could mean retiring to an idyllic country cottage, buying a second property, or even remortgaging to help a younger member of the family take their first step onto the property ladder themselves.
“Ipswich Building Society believes that the growth in both choice and access for older borrowers shows lending to over 50s is becoming the new normal.”
(Story source: What Mortgage)