Nationwide extends later life borrowing to remortgagers

Nationwide extends later life borrowing to remortgagers

Nationwide Building Society has changed policy again so now its new maximum age for borrowing of 85 will apply to both existing mortgage customers and those remortgaging from other lenders.

Last month, the lender announced it was to allow existing customers with retirement income the option of borrowing up to the age of 85 - moving from age 75 - giving Nationwide the current highest age threshold of any high street lender.

This will now be extended to those borrowers remortgaging to Nationwide from other lenders and fitting the same criteria.

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The option will initially be made available from mid-July through mortgage intermediaries only, with direct applications rolled out in August.

It will be available across the product range, with a limit for any new borrowing of £150,000 and at a loan-to-value limited to a maximum 60 per cent.

The maximum age at application is 80 and criteria will be the same for both existing Nationwide mortgage customers and those remortgaging from other lenders.

Michelle Lawson, director at Hampshire-based Lawson Financial, commented: “It is excellent to see lenders reacting to the problem of age limitations for the older generation, as some people do have sizeable income past retirement so it is a shame this is restrictive.

“Hopefully the rest will start to follow,” she added.

In May, industry experts suggested Nationwide’s move would encourage other major lenders to follow suit and catch up with the rest of the building society sector.

Henry Jordan, head of mortgages at Nationwide Building Society, said older borrowers predominantly look to use their primary asset - their home - to give both them and their family more choice about their lifestyle options.

He said: “This is another stage in Nationwide’s drive to widen choice for customers, but we recognise the risks that can accompany borrowing at an older age, so we are taking a balanced and prudent approach.

“Customers will need a stable and ongoing retirement income and we will reflect the additional risks that older borrowers may face by basing our assessment for joint borrowers on the proportion of income which will continue, should part of that joint income be lost during the mortgage term.”

The changes follow Nationwide’s move in February to simplify the definition of a client’s retirement age, using only the anticipated retirement age, rather than the state pension age, up to a maximum age of 70.

Last month, the society also confirmed it was looking at ways to enter the equity release market in a “clear, simple, safe and secure way”.

Yesterday (16 June), Nationwide became an associate member of the Association of British Insurers.