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Nationwide Raises Home Loan Age Limit To 85 Years

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http://www.bbc.co.uk/news/business-36243871

There have been calls for the industry to do more to help older buyers

Nationwide is raising its age limit for people paying off mortgages by 10 years to 85, in the latest sign of the impact of rising house prices on buyers.

The building society said the increase was due to "growing demand", and the limit would be in force from July.

It means a 60-year-old could take out a 25-year mortgage as long as they prove they can afford the repayments.

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

There have been calls for the industry to do more to help older buyers after tougher mortgage checks, bought in in the wake of the financial crisis, have made it harder for middle-aged people to get a home loan.

'Controlled manner'

Rising house prices have exacerbated the issue, with many people not able to afford to buy their first home until they are in their thirties or forties.

Nationwide said the new age limit would apply to existing customers for all its standard mortgages, but the maximum loan size would be £150,000, and could be no greater than 60% of the property value.

"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," said Nationwide head of mortgages Henry Jordan.

House prices grew 7.6% in the year to February, official statistics suggest.

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

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

The policies of rival mortgage lenders for older borrowers varies. Santander, for example, says 75 is its cut-off while RBS' upper age limit is 70.

HSBC says it does not turn down mortgages on the basis of age, but reviews applications of those over 75 on "a case by case basis".

At Barclays the upper age limit is 70, or the customer's retirement date - whichever is sooner.

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Amazing. It kind of screws with the "me home is me pension" mantra though.

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Thing is, its not really the age limit thats a problem.

NW have to justify that they can carry on paying mortgage.

Problem is if your are dealign with someone 70+ ther's the risk they'll end up in a home, and have very hefty care home fees to pay.

I think there is a risk that the NW might be very exposed to Basel 3 capital requirements.

They are behaving a bit reckless, against what the BoE recomend to rank down their risk.

If - probably when = they pop they'll have some explaining to do.

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It's sad to see the nationwide do this.

Their adverts are sickening to me, they tell everyone how they are their best friends ( IMHO ) meanwhile driving up prices and hammering savers.

They will deserve anything comeback they get,

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.....taking out a repayment mortgage at the age of 60....well I never, what have they been doing the last 40 odd years?...paying interest only because borrowing the equity to boost income thus living beyond means....or mid-life relationship breakdowns?...

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The building society said the increase was due to them desperately needing new business "growing demand", and the limit would be in force from July.

Low sales volume + low lending rate desperation seen from all the lenders now.

It's all lining up for an autumn-time crash.

Edited by canbuywontbuy

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For me this looks really interesting, says Tom McPhail, head of pensions research at Hargreaves Lansdown on Wake Up To Money.


He's commenting on Nationwide's increase in the maximum age for mortgages to 85, previously its limit was 75 years.


"Why pay off the mortgage at at all? Having lent the money and let someone buy a house, why not just let it run until the day they die?"


"As long as the value of the property is there to meet the liability in the future, why worry about paying it off when you are alive?"



In other words lets make sure people never pay the morgage off.Then nothing to pass down.Nobody can retire,we can keep the tax flowing.



If no capital needs to be paid,and we can have 2% mortgages we can all buy a mansion.Nationwide must have a shed load of IO mortgages with no hope of them being paid.







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Its only logical.. The young have no money.. The old have their entitlements, all the assets and their final salary pensions.. They need to sell to where the money is.. No one else has the income stream or the assets

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Yes....as long as the asset is worth more than the debt, why would the lenders want to kill that debt...only debt and house prices keeping them alive.;)

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"Why pay off the mortgage at at all? Having lent the money and let someone buy a house, why not just let it run until the day they die?"

"As long as the value of the property is there to meet the liability in the future, why worry about paying it off when you are alive?"

...

If no capital needs to be paid,and we can have 2% mortgages we can all buy a mansion.Nationwide must have a shed load of IO mortgages with no hope of them being paid.

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1. Because the bank is on hook for the capital and its going to get more and more expensive. Repaying the capital reduces risks and fres up capital. And repoing a propery is a very expensive business. And there's no guarantee that sellign a house will cover the mortggae - ask someone in Middlesbrough, Wakefield etc etc etc.

2. NW lends mainly in South. London is the epicentre of high LTV, high PE IO lending.

Yes, they do - stuffed to the gills with crap just as the Basel 3 capital requirements come in.

Smells like NR/B+B - chasing suicidal busienss for short term margins.

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For me this looks really interesting, says Tom McPhail, head of pensions research at Hargreaves Lansdown on Wake Up To Money.

He's commenting on Nationwide's increase in the maximum age for mortgages to 85, previously its limit was 75 years.

"Why pay off the mortgage at at all? Having lent the money and let someone buy a house, why not just let it run until the day they die?"

"As long as the value of the property is there to meet the liability in the future, why worry about paying it off when you are alive?"

In other words lets make sure people never pay the morgage off.Then nothing to pass down.Nobody can retire,we can keep the tax flowing.

If no capital needs to be paid,and we can have 2% mortgages we can all buy a mansion.Nationwide must have a shed load of IO mortgages with no hope of them being paid.

A pensions researcher (the "head", no less!) says it's better to have a mortgage until literally your dying day? Seriously? Does he know what retirement is? How does someone who's 81 years old pay off their monthly repayments? Work? With their state pension? With their private (ha!) pension? Nope. Why does he think it's a good idea?

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A pensions researcher (the "head", no less!) says it's better to have a mortgage until literally your dying day? Seriously? Does he know what retirement is? How does someone who's 81 years old pay off their monthly repayments? Work? With their state pension? With their private (ha!) pension? Nope. Why does he think it's a good idea?

Because he can earn fess from it.

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The lower the interest charges, the more they have to lend for longer....borrowed and saved money is fast becoming worthless....but hard worked for earned money is far harder to make and keep ;).

Edited by winkie

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