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Halifax mortgage age change reflects 'evolving needs' of older people

Published 06/05/2016

Halifax says changing demographics means mortgages can run until the age of 80, up from 75
Halifax says changing demographics means mortgages can run until the age of 80, up from 75

Halifax is increasing its upper age limit for mortgage lending to 80 - prompting experts to suggest that other major lenders could follow suit.

The bank - which is part of Britain's biggest mortgage lender Lloyds Banking Group - is changing the age limit from 75 to 80 from Monday, meaning that for new mortgage applications the term will be allowed to run until the borrower's 80th birthday.

Halifax said the move is a response to changing demographics, with people living and working for longer.

David Hollingworth, a spokesman for broker London and Country, welcomed the announcement as a positive step.

He told the Press Association: "The question has been, why aren't more high street names able to help older borrowers?"

Mr Hollingworth said that some smaller building societies have been flexible when it comes to older borrowers for a while, but "still too few lenders have taken the chance to review their approach".

He said the move by such a major lender as Halifax may "open the door" for other lenders to look at their rules when it comes to older borrowers.

Stephen Noakes, managing director for retail customer products at Halifax, said: "As demographics and working habits continue to change, we continually review our products and policies to ensure they reflect the evolving needs of our customers, including those who wish to continue working longer."

Other lenders have varying rules in place when it comes to mortgage lending and age limits. For example, Metro Bank has no age cap for residential mortgages - but borrowers still have to go through the standard checks to make sure they can afford their mortgage. Santander and Nationwide Building Society have a cut-off at the age of 75 for mortgages.

A spokesman for HSBC said: "We do not decline mortgage applications due to age. As a responsible lender, we need to make sure mortgages are affordable to customers across the term of their entire loan - that's why all our residential mortgage applications that take a customer beyond the age of 75 are reviewed on a case by case basis."

An ageing population, with people working for longer, is one of the biggest features of Britain's recent demographic changes.

In the next five years, the number of consumers aged over 65 in the UK is expected to increase by 1.1 million, according to the Financial Conduct Authority.

A recent survey by Halifax also suggested that one in three 20 to 45-year-olds expect to be working beyond their retirement age to pay off their mortgage.

Among those who are not yet on the property ladder, 39% believe they will be working later in life to pay for their property and one in 12 expect to be paying their mortgage throughout their life.

In addition, major cities are also being heralded as "unaffordable blackspots" for first-time buyers, research from Post Office Money Mortgages found, meaning it may be impossible for some younger buyers to get onto the property ladder without longer terms.

Halifax's announcement comes in the week that Barclays also announced it would offer zero-deposit mortgages to first-time buyers.

Barclays' policy on mortgages generally is that the mortgage must be repaid by the age of 70, or the customers' retirement date - whichever is sooner. Applications beyond this can be considered on an exceptional basis.

Barclays said it has an obligation to lend responsibly and its limits are in place to help make sure customers do not face financial difficulty towards the end of their mortgage term.

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