The news today repeatedly focuses on how difficult it is for young first-time buyers to get a mortgage, but there is a whole other generation that are being quietly locked out of the housing market too - those looking for pensioner mortgages.
The news today repeatedly focuses on how difficult it is for young first-time buyers to get a mortgage, but there is a whole other generation that are being quietly locked out of the housing market too - those looking for pensioner mortgages.
A significant number of lenders refuse to give mortgages to anyone over the age of 65 - even if they have a generously sized deposit in place.
This can have a huge effect on the pensioner's plans. It is easy to assume that pensioners do not need a mortgage because they bought a house years ago, but there are many reasons why pensioners may need a home loan. A divorcee may wish to buy a new home, or a couple may want to remortgage to fund house improvements or because their savings have been hit unexpectedly by the recession.
Alternatively, they may be looking to move across the country to be closer to their children and grandchildren and may need to borrow a bit of extra money to move to a more expensive area.
Some pensioners may need a mortgage of just £50,000 to buy a new £500,000 house near their children in the South East, for example, but lenders will refuse them a mortgage that is just 10 per cent of the property's value.
This can seem grossly unfair to pensioners, who find their life plans thwarted by this difficulty to find a mortgage. While they may no longer be working, they still have a steady income from their pension and any other investment plans they may have taken out, so they are as likely to make their monthly payments as an employed borrower half their age.
Thankfully, some lenders have recognised the plight of the forgotten generation and can offer mortgages to pensioners. These mortgages are available to borrowers over 60 and they give older people the freedom to move house, continue to investigate the best remortgage deals, or buy a new home if they need to.
For more information, please see our section on mortgages for pensioners , or call us 020 77 100 400 today.
