Family increases maximum borrowing age to 95

Family increases maximum borrowing age to 95

Family is increasing its mortgage term for older borrowers to the age of 95, meaning a 60-year-old borrower could have a 35-year mortgage term, or an 80-year-old a 15-year mortgage term with the building society.

The mutual said the move was in response to "changing socio-economics", which demand new strategies from businesses.

Older borrowers will be able to access these mortgage as long as they are taking out a repayment or combined repayment and interest-only mortgages.

Keith Barber, director of business development at Family Building Society, said: "Having some or all of your mortgage on a repayment basis, rather than interest-only, means that the outstanding debt will be reducing over time and extending the term over which this can be done makes the monthly payment more affordable.

"This will appeal to many retired borrowers who have found that, for whatever reason, they have not been able to repay their mortgage as quickly as they would have liked.

“Being able to reduce your mortgage debt during retirement gives you more options in future. This may mean that there is scope later for additional borrowing to address care needs, or simply more money to pass on to your family as an inheritance, for example."

The building society is the latest to raise age limits after criticism of the sector by the FCA in September 2017.

The regulator said older people were not able to get the products they needed, with lenders having a "limited appetite" for loans for older people, though it added that there had been "some progress" in this area.

The FCA stated: "Firms may be unnecessarily limiting themselves, and older borrowers, by having rigid policies or systems and controls that are unable to consider individual circumstances, potentially resulting in unintended exclusion of credit-worthy consumers in the target market."

Daniel Bailey, mortgage adviser at Middleton Finance in Chesterfield, said the move to increase the maximum age from 80 to 95 was welcome.

He said: "This will have a place in the market for older people who want to stay in their home. In my view, pension income is more solid than income from being employed or self-employed so it makes sense for a mortgage company to look at it.

"There are few lenders that go up to this age and it is a niche that building societies tend to fill."