This week saw good news for pensioner mortgages as the mortgage regulator, the Financial Conduct Authority (FCA), set out its rules for the mortgage market from 2014 onward.
The FCA this week published the long awaited Mortgage Market Review (MMR) which sets out the rules for the mortgage market to come into force from April 2014. The review was aimed at helping to prevent a future mortgage crash following the rush to lend during the last decade.
Amongst other things, the FCA ruled that mortgages for pensioners were not to be outlawed and indeed there is to be no maximum age on borrowers providing they can fulfil affordability and other criteria checks of lenders.
In recent years we have seen a number of lenders restrict their maximum age policy. For example Halifax placed a maximum age on their residential mortgages of 75 and also stopped lending to new customers through their Retirement Home Plan mortgage which granted an interest only mortgage to applicants for their lifetime.
However, despite the guidelines in the review, the market remains bleak for those aged over 70 and looking for a mortgage. There are only a handful of lenders with no age cap in England and even fewer in Scotland.
On the positive side, it maybe that lenders start to relax their maximum age policy once they have had a chance to digest the MMR. Watch this space.