Hinckley and Rugby BS drop mortgage age limits

Hinckley and Rugby BS drop mortgage age limits

Hinckley and Rugby Building Society has scrapped maximum age limits across its entire range of mortgage products.

The lender previously had an age limit of 75 at the end of a mortgage term but removed this in response to demand from brokers for more products that cater for lending to older clients. It will now consider each application individually.

Hinckley and Rugby said its mortgage referrals committee, which comprises six senior staff including the chief executive and operations director, will have responsibility for considering later life lending cases.

Carolyn Thornley-Yates, head of sales and marketing at Hinckley and Rugby, said: "From talking to brokers every day we have become increasingly aware of the opportunity for a common sense, manual lender to look in depth at cases where the borrower would be 75-plus at term-end.

"People are living longer, working later and, in increasing numbers, wanting to finance a mortgage into part-time employment and their retirement. There is a combination of house value, income, loan-to-value and other circumstances where lending into a borrower's 80s and 90s is affordable."

A growing number of lenders are raising or removing age caps on mortgages as they seek to serve older borrowers.

The Building Societies Association (BSA) has reported that 34 of its member societies will lend to borrowers in their 80s or beyond, up from 18 in 2015.

The most recent data from the BSA shows 59,668 mortgages were sold in the first half of 2017 that will mature when a borrower is 65 or older, a 45 per cent increase compared with the first half of 2015.

The BSA also reported a 162 per cent increase in mortgages maturing between ages 79 and 84 during the period compared with 2015.

Steve Paterson, director of Teesside Money, said the FCA recently changed the way retirement interest-only mortgages are regulated, placing them under standard mortgage rules rather than under equity release rules.

Mr Paterson said as many older people now need to pay off maturing interest-only mortgages, lenders like Hinckley and Rugby may be seeking to serve this market.