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Eddie_George

At Last! You Can Take Out A Mortgage Over 65

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LENDERS are finally offering a fairer deal on mortgages for older borrowers, just two weeks after Britain’s 44 building societies pledged to review their age limits in a victory for The Sunday Times’s campaign.
Market Harborough building society has told Money it has raised the maximum age by which a mortgage must have been repaid from 80 to 85, with the chief executive describing the case for fairer treatment of older people as “unarguable”.
So, who are the people who need to take out a mortgage after they have retired and keep paying it back well into their seventies and eighties? We talked to two families to find out why and how they did it — and how they plan to pay for it. In both cases, the borrowers had stopped working and are relying on the income from their pensions, rather than a salary.

Wonderful news! :wacko:

Paywall

Edited by Eddie_George

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I would not get excited. Market Harborough BS are hardly HSBC are they?

They'll have about 10 mortgages to sell. MOst will probably go to someone connected to the BS.

Its nothing more that a p1ss poor bit of PR/freead.

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Bloke I know told me he'd taken out a 600K mortgage which he'll pay off when he's 70.

Has the world gone mad ?

I bet its more 'will end when he's 70'.

Put the numbers in context. 600k is the average gross salary for 25 years.

Or about 40 if you take off the tax. Basicially the net average salary for a working lifetime.

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in a victory for The Sunday Times’s campaign.

Paid for by bankers? Cue the smell of freshly baked bread.

Those thoughtful banking people with their Hovis mood music adverts always thinking how best to help people.

Edited by billybong

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Bloke I know told me he'd taken out a 600K mortgage which he'll pay off when he's 70.Has the world gone mad ?

Yes he will repay it when dead or goes into care home...from the sale of the house....lenders keeping their fingers crossed*.......I thought it common knowledge that some pensioners earn more retired than many do working full time over a lifetime...less living costs, more disposal income.

Anyway what good is holding assets of value when old and can't make use of them......borrow against them at the right price, spend them or give them away.....born with nought, die with nought.

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Ray and Daphne Winter, both 67 and both retired, planned to be mortgage-free by the time they were 70. However, when they saw how hard it was for their youngest daughter Kathryn to buy a home in London, they decided to help her. The average price of a property in the capital is £531,000, according to the Office for National Statistics.
[...]
Kathryn, who is in her early thirties and works in marketing, had been renting in southwest London. Her parents remortgaged their house near Dartford, Kent, to raise a six-figure sum for her deposit.
[...]
Finding a willing lender was not easy since so many have been turning away borrowers purely on the grounds of age. After approaching several banks, Ray turned to the mortgage broker John Charcol. One of its top consultants found a mortgage with Harpenden building society, which lent to the Winters on a 12-year term.
Ray Winter, who worked for Glaxo Wellcome, the drugs giant now known as Glaxo Smith Kline, will be 79 when the mortgage term ends.
[..]
With the deposit from her parents, Kathryn has bought a house in south London, taking out a first-time buyer mortgage.
Ray said her rate was substantially lower than the one he was offered — his mortgage is 3.69%.
He added: “What I find surprising is my daughter is employed in an industry where it is a bit hire and fire.
“I’m in a fortunate position that I’ve got an index-linked pension from a FTSE 100 company and in terms of the collateral I’ve got in this residential property.
“From a financial point of view, I would have thought I would have been the safest bet, but in fact building societies and banks want to charge me the highest interest rate. I don’t understand it.”

Jesus wept.....

Remember these names, they'll be the sob stories of the future.

Edited by Eddie_George

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He added: “What I find surprising is my daughter is employed in an industry where it is a bit hire and fire.

He must have got early retirement about 30 years or so ago.

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Recycling a Boomer DB pension and MEW back into the London property market so his daughter can pursue her career in bullsh1tting marketing, what a heartwarming tale.

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'“I’m in a fortunate position that I’ve got an index-linked pension from a FTSE 100 company and in terms of the collateral I’ve got in this residential property.


“From a financial point of view, I would have thought I would have been the safest bet, but in fact building societies and banks want to charge me the highest interest rate. I don’t understand it.”'


1. The bank has the collateral. He's a got a mortgage to serve now.


2. Why? What makes him think a 67 yo bloke is a good bet for a mortgage FFS? He's got pension but that's it.

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Recycling a Boomer DB pension and MEW back into the London property market so his daughter can pursue her career in bullsh1tting marketing, what a heartwarming tale.

:lol:

I think it's time that we renamed the baby boomers in better keeping with the Generation X, Generation Rent labelling system. I like the sound of Generation Sense of Entitlement Shithead or maybe Generation Theft? (Apologies to any boomer hpc posters who do not have a political and economic perspective entirely centred on their sound judgement in riding a multi-generational property boom which has left the country with a debt overhang that is crippling the economy whilst also managing to extract pension entitlements from private and public sectors which neither sector can afford to pay to the following generations.)

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'Kathryn, who is in her early thirties and works in marketing'

She'll be starting family soon.

And I say that as not some sort of old buffer but as someone who knows the bilogical clock ticks loudest in Bridgit Jones types living in London.

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He must have got early retirement about 30 years or so ago.

Probably went from Dartford Plant.I went down there when we bought them (Glaxo) to cover a lot of people leaving on redundancy for a few months.Massive lumpers were handed out, 1/40 final salary pensions and boosted by 40% if you took redundancy.Also you were opted into SERPS so were one of the few Final salary Pensions where you got a SERPS pension on top of the work one.They are RPI linked as well.He will of had £200k+ of share options to cash as well if he was there between 85 and 95.With the 40% pension boost many were getting £500 a week pensions at 50 only having worked there for 25 years +£60k lumpers and £200k+ from share options coming live.

Dont know why the young complain,surely jobs now pay the same right? :ph34r:

Edited by durhamborn

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This isn't necessarily about 'helping' older borrowers. It opens the door to far longer mortgages, more 'affordable' according to their affordability tests and therefore far greater multiples and higher amounts.

It's everything to do with the banks trying to maintain their profits from mortgage lending, any "benefit" to older would be mortgagees is entirely circumstantial. Property prices have risen to the point that first time buyers are increasingly priced out, changes to tax on BTL means that's likely to go into decline - so allowing older people to take mortgages out opens up another customer base which the banks can market as doing people a "favour". The fact that some parents appear willing to put their houses & financial welfare on the line to help their grown up kids suggests it could be a very lucrative market for the banks.

Helping your children is one of the most basic of human instincts - but mortgaging your house to allow them to buy really doesn't strike me as a smart move.....

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The big global problem is lack of liquidity.........liquidity can only be accessed via releasing cash via over valued assets......short-termism means shifting today's problem to the futures problem herein lies the problem. ;)

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This isn't necessarily about 'helping' older borrowers. It opens the door to far longer mortgages, more 'affordable' according to their affordability tests and therefore far greater multiples and higher amounts.

The multiples will of course also be constrained by the 15% at less that 4.5x FPC cap, which is separate to the MMR rules.

The move to require lenders to assess affordability on the basis of a 25 year mortgage term was dropped between the proposals and the final rules in FCA FS12/16. There were never any rules requiring them to restrict mortgage tenors. (I was mistaken about the role of mortgage tenors in assessing affordability in the past and may have posted incorrecly to that effect. DYOR!)

Nationwide will give you a forty year mortgage!

Likewise the rules on making loans which will continue into retirement. The final rules gave lenders considerable latitude. Any age caps they arbitrarily imposed were not driven by MMR rules.

Now we are a little ways down the road from implementation of the MMR one reading is that the lenders were overly aggressive in an attempt to avoid being the one lender whose loose lending stood out and attracted the censure of the FCA.

Where MMR bites is requiring affordability to be assessed on a repayment basis against a given rate which is assessed on the (possibly unwarranted) assumption that over the next five years market rates will return to more historically normal levels.

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'“I’m in a fortunate position that I’ve got an index-linked pension from a FTSE 100 company and in terms of the collateral I’ve got in this residential property.

“From a financial point of view, I would have thought I would have been the safest bet, but in fact building societies and banks want to charge me the highest interest rate. I don’t understand it.”'

1. The bank has the collateral. He's a got a mortgage to serve now.

2. Why? What makes him think a 67 yo bloke is a good bet for a mortgage FFS? He's got pension but that's it.

What he meant was that his daughter could lose her job and have no money coming in, but he is not going to be sacked from retirement and have his pension stopped. And his pension may be a pretty good one.

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What he meant was that his daughter could lose her job and have no money coming in, but he is not going to be sacked from retirement and have his pension stopped. And his pension may be a pretty good one.

His pension might be but at 67 he's a lot closer to death than his daughter.

An old age health incident i.e. a stroke might find his pension being swallowed up in care fees.

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Years ago you had to have a mortgage protection policy as a condition of a repayment morgage. (Don't think you could even get an interest only mortgage then.) No-one (very few??) gets this type of insurance now but it pays the morgage if you should pop your clogs before the end of the mortgage term. It was useful especially for parents with dependent children if the other parent should die.

I wonder what the insurance possibiities will be for post-retirement borrowers. Seems incredibly risky to me. Still what do I know? :)

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His pension might be but at 67 he's a lot closer to death than his daughter.

An old age health incident i.e. a stroke might find his pension being swallowed up in care fees.

Yes, that may be a concern for him, but it's hardly going to bother the lender, who would have first call on the proceeds if the house had to be sold for care fees.

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The reality of the situation is there are already thousands of people over the age of 65 who still have a mortgage outstanding and no way to pay it back only enough to pay the interest......this will only get worse unless plan for it to see no debt at time of retirement.....buy now pay latter or pay now buy later. ;)

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