Brokers have criticised Halifax for reducing the maximum working age on some of its mortgage products.
The Mortgage Expert adviser, Darryl Dhoffer, said the changes were “outrageous” and was “tightening the screws on the very borrowers who need them the most”.
The bank has changed the maximum age that it will consider earned income from 75 to 70, after which proof of pension income to support the mortgage is required.
This change only applies in two circumstances, namely new remortgage applications with any capital raising or additional borrowing, and some new purchase and remortgage applications due to the level of credit score and overall credit profile.
This change is expected to take effect from March 18.
Dhoffer accused Halifax of turning a blind eye to the struggles of average people as high mortgage rates and shorter terms are a “recipe for disaster” thereby “pushing even more borrowers into debt and hardship”.
This sentiment was shared by Lodestone Mortgages & Protection director, Craig Fish, who described the announcement as a “slap in the face to those in need from Halifax”.
He explained: “When most lenders are adjusting their criteria to help more people, Halifax are adjusting theirs to help less, and more importantly to help less of those who need it the most.”
Fish argued the change will “tarnish” Halifax’s name and said it was “no longer the popular name on the high street it used to be”.
Meanwhile, South Coast Mortgage Services director, Gareth Davies, described the change of criteria as “disastrous”.
He said it amounted to essentially “cherry-picking” the better clients with enhanced criteria.
“Halifax needs to make their minds up when it comes to retirement criteria,” he advised.
“This seems a strange approach given that a large proportion of the UK population is likely to work longer and delay retirement,” R3 Mortgages director, Riz Malik, stated.
Malik also asked: “What relevance does it have if someone wants to borrow money or have a lower score?
“While lenders should be looking to be more flexible with their criteria, Halifax seems to be moving the other way.”
However, Peak Mortgages and Protection brand director, Rhys Schofield, said: “It’s easy to raise the torch and pitchfork at the Halifax here, but I can see where they’re coming from when you consider that they need to lend responsibly.
“Is it ethical to dish out mortgages like sweets well past when most people would want to retire?”
He added that, while this may seem harsh now to borrowers in genuine need, allowing those sorts of applications and saddling people with more debt later into life could be “more problematic” in the long run.
A spokesperson for Halifax Intermediaries said: “These changes have been made as part of a regular review of our lending criteria and will ensure we can continue to lend responsibly to a broad range of customers.
“For all other applications we will continue to use a maximum working age of 75.”
It additionally pointed out that its max working age is in line with the industry and higher than some mainstream lenders’ maximum age at the end of term, which can be 70, or lower.
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