Britain's biggest building society raises upper age limit for mortgages to 85


Britain's biggest building society is increasing its maximum age for mortgages to 85, to meet a "growing demand" from customers to borrow later in life.

Nationwide Building Society has previously had a maximum 75 year age limit in place for mortgage maturity - but it will increase this by 10 years from July, as part of wider efforts to offer borrowers greater support in retirement.

The move comes as Halifax increases its age limit for mortgages from 75 to 80 from Monday.

Nationwide said its change would enable existing customers with retirement income to borrow up to the age of 80, with a maximum age at maturity of 85. This could enable pensioners to borrow to move house or to meet other needs.

The option will be available on all standard Nationwide mortgage products up to 60% loan-to-value (LTV) and with a maximum loan size of £150,000.

In February, Nationwide simplified its approach to assessing retirement income, and it now uses the customer's anticipated retirement age rather than the state pension age, up to a maximum age of 70.

Henry Jordan, Nationwide head of mortgages, said: "We are taking a series of steps to meet a growing demand from customers to be able to borrow in later life.

"These customers are often asset rich, with significant equity in their home, and they wish to have the flexibility to borrow against it.

"Access to the mainstream market has been a challenge for older customers, resulting in their needs going unfulfilled.

"This measure helps to address these needs in a prudent, controlled manner.

"Nationwide is committed to providing a range of options for all customers and this will be the first step towards developing a wider range of options for those looking to borrow into retirement."

Last week, Halifax - which is part of Britain's biggest mortgage lender Lloyds Banking Group - announced its plans to change its mortgage rules, meaning that for new mortgage applications the term would be allowed to run until the borrower's 80th birthday.

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

There have been calls for lenders to do more to help older borrowers - and 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 has a cut-off at the age of 75 for mortgages while for RBS the age limit is 70.

A spokesman for HSBC said last week: "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."

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 has 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.

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 expected to be working beyond their retirement age to pay off their mortgage.

Among those who were not yet on the property ladder, 39% believed they would be working later in life to pay for their property and one in 12 expected to be paying their mortgage throughout their life.

In addition, major cities were also being deemed as "unaffordable blackspots" for first-time buyers as property prices spiralled, according to recent research from Post Office Money Mortgages, meaning some younger aspiring buyers may struggle without longer terms.