When I’m 85…
How old is too old for a mortgage? Well, the upper age limit to pay off a mortgage is now 85, according to the Nationwide.
The building society has raised the ceiling by 10 years due to ‘increasing demand’.
With many homeowners traditionally taking out a 25 year capital repayment mortgage, this means a new applicant could successfully apply for a home loan at the age of 60.
Meanwhile, the Halifax has lifted the cap to 80.
It is another sign of the rising demand for housing. While some analysts have concerns, it may actually have some benefits particularly as the age profile for first property purchases has risen; many people are now unable to afford their first home until they are in their thirties or forties.
In addition, there have been concerns more recently about it becoming tougher for middle-aged buyers to secure a mortgage.
The new age limit could be a godsend for both of these groups, whilst also potentially injecting a little extra movement into the market.
It also reflects the trends towards longer life expectancies and the steady rise of the state retirement age.
Nationwide and Halifax both insist they will manage the new mortgage applications in a prudent way to ensure borrowers can afford the repayments.
Nationwide has also set a maximum loan size of £150,000, which must be no greater than 60% of the property value.
The developments come as the new house prices index from the Halifax showed that the property market remained steady. You can read more here: www.bbc.co.uk/news/business-36243871
Growth rose by 9.2% in April 2016 compared to April 2015. That compares with an annual 10.1% rise for March and comes after the rush to beat the new stamp duty tax rates for buy to let and second homes at the start of April. You can read more here: www.bbc.co.uk/news/business-36245756
The next interest rate decision by the Bank of England is tomorrow, May 12, although it is highly unlikely that we will see a rise from the historic low of 0.5%. You can read more here: www.bankofengland.co.uk/Pages/home.aspx
Indeed, some commentators have suggested we may see a further cut in rates depending on the EU referendum result. We shall wait and see!
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How old is too old for a mortgage? Well, the upper age limit to pay off a mortgage is now…