Having been one of the first lenders to remove our maximum age limit, we have been lending into and in retirement since 2010. During that time the later life lending market has changed significantly. The UK’s ageing population has made it imperative that lenders like us offer viable financially safe solutions to older borrowers.  Many of these borrowers are likely to have bought interest only mortgages in the early 1980s and are now looking to retire. With possible shortfalls in endowments these people may be looking for ways to extend their terms or use pension income to continue to stay in their property.

The increase in over 65s looking for a mortgage is, according to recent statistics from the Intermediary Mortgage Lenders Association (IMLA), growing substantially more than the UK’s over 65 population in general.  The IMLA’s report on Later Life Lending highlighted the challenges that these borrowers face when their interest only mortgages mature and showed that:

• The number of homeowners over the age of 65 in the UK has risen by 52% in the past 20 years, while the over 65 population in general has risen just 28%, with accelerated growth on the horizon.
• Over 40,000 interest-only loans held by the over 65s are due to mature each year between 2017 and 2032, with many of these borrowers requiring extended mortgage terms to stay in their homes through retirement.

At Buckinghamshire Building Society we are able to consider a wide range of UK incomes such as pension and investment portfolios, land and property as well as the usual private and state pensions. This, coupled with our manual underwriting, means finding solutions for older borrowers who are in retirement or going into retirement means we can apply our criteria and use a common sense approach to affordability not just a ‘computer says no’ approach.

Some of our customers’ later life lending solutions in action

Raising funds for Home Improvements (Joint Mortgage)

Mr & Mrs M are mortgage free and looking to raise £50,000 for home improvements on their 4 bedroomed property in Horsham, which is currently worth £650,000.

What we did for Mr & Mrs M: By enabling Mr and Mrs M to borrow in retirement, they have been able to raise funds to carry out the necessary home improvements to their home which enables them to stay there for as long as they wish to, or in the event of downsizing it upgrades their property which will make it easier to sell.

Remortgage from current lender that will not extend term on interest only mortgage.

Ms S, who is single, has applied for a £60,000 to re-mortgage her Romney Marsh home in Essex. The property is valued at £260,000 and her existing High Street lender is refusing to extend her interest only mortgage term into retirement and insisting on full redemption of the loan. Ms S has no dependants and is keen to remain in her property for as long as possible.

What we did for Ms S: Based on her pension income, we were able to offer a “like for like” remortgage based on Ms S’ pension income which enabled her to repay her existing lender and remain in her property without the need to sell and downsize.

All names have been anonymised for security reasons.

Find our latest retirement products here