The news that Nationwide is raising its upper age limit so that 60-year-olds can take out 25-year mortgages is an interesting one. Many of the other leading providers such as Halifax, Santander, HBSC and Barclays now have upper limits that mean people can extend their mortgages into their 70s and even 80s. Of course they come with many provisos. Some say it’s on a case-by-case basis, or only for a certain percentage of the price, or only for current customers.
The overall theme though is that mortgage lenders are recognising that people are living and working for longer, so in a better position to keep up payments on a mortgage further into life. It’s also realistic thinking in the face of ever-increasing house prices.
Why would people in their 60s want to take out a new mortgage? It could be that they want to move to a more desirable part of the country. Homes in the Cotswolds don’t come cheaply anymore. Or they could be moving into the increasingly popular retirement apartment blocks or villages that offer a comfortable, sociable and well-maintained lifestyle, but may only be downsizing in the sense of space rather than cost.
It could also mean that asset-rich older people are taking equity out of their property to spend on themselves or use to help their families. According to Dominik Lipnicki of Your Mortgage Decisions Ltd, quoted in The Telegraph, the move is likely to boost the number of pensioners increasing borrowing to pass on deposits to their children.