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The number of mortgages that are allowed to end when borrowers are aged between 80 and 84-years-old, has increased from zero in 2014 to 1,078 products today, according to recent research from Moneyfacts.

Meanwhile, the number of mortgages that allow a borrower to be aged between 65 and 69 when it comes to an end has reduced from 923 products to 18 over the same period. This suggests that lenders are more open to allowing borrowers to be older at the end of a mortgage term.

This lowering of the maximum mortgage completion age is common across different providers, according to the recent data from Moneyfacts. The total percentage of mortgages on the market that are permitted to mature when the borrower is 75 years old and over was 52 per cent in 2014, which has since risen to 72 per cent today.

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In the past, older homeowners would have found it harder to secure mortgages that were set to end once they were past a certain age. This can be attributed to the effects of the financial crisis as mortgage providers introduced several restrictive measures to reduce their exposure to risk. This included the lowering of the maximum age allowed at the end of the mortgage term, according to Moneyfacts.

These restrictions appear to have softened, which make it much easier for older homeowners to secure mortgages later in life.

The number of individuals buying their first home at the age of 40 or above has increased considerably in recent years as well as the number of homeowners that are securing mortgage terms for longer periods of time, according to the recent data from Moneyfacts.

This comes as a result of the longevity of the UK population and an increased number of people working past the traditional retirement age, not to mention to rising age of first-time buyers. It is, therefore, becoming increasingly unrealistic for mortgages to end when homeowners are 65 years old.

It appears that it is some of the smaller lenders in the market who have been leading the way with this trend of newly available products to older homeowners, according to Moneyfacts.

Some lenders even offer retirement interest-only mortgages, however, homeowners who are retired need to provide evidence that they can keep up with their monthly payments. Some mortgage products also remove the need for a formal end date altogether, making it acceptable for the mortgage to be repaid on the sale of the property, the death of the homeowner, or when they move into long term care.

Darren Cook, a finance expert at Moneyfacts.co.uk commented: “Over the past five years, mortgage providers have become far more accommodating to borrowers who wish, or may have no alternative but to extend their mortgage term well past the official pension age.

“In particular, the scaling back of strict criteria around the maximum age at the end of a mortgage must be a welcome relief for those borrowers who may have reached the end of their interest-only mortgage at age 65 and have had few options available to turn to, or for those looking to release equity or purchase a retirement property.

“The scrapping of the Default Retirement Age in 2011 now means that the official pension age and retirement age are no longer one and the same, and employees can choose to work beyond state pension age for reasons other than financial need.

“Lenders are clearly reacting to this, even at the highest tier, with those who will be aged 85 or over at the end of a mortgage now having eight times as many deals to choose from than they did five years ago, rising from 33 products in February 2014 to 263 this month. With this trend looking to continue as many of us retire later, older borrowers will welcome this extra choice.”

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Jim Kersey
Jim focuses on the socio-economic impact of housing. His reporting for Property Notify often touches on topics such as changes in sentiment among investors in various housing sectors, as well as the impact of various developments on the average person.

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