Nationwide launches mortgage for up to 85 year olds

Nationwide’s move will mean a 60-year old can take out a 25-year mortgage, provided they could show how they’d afford the repayments.

Nationwide has just raised its maximum age limit for paying back a mortgage from 75 to 85.

The lender says the new age limit is for existing customers, the maximum loan size will be £150,000 and the amount lent can be no more than 60% of the property value.

The building society is the latest big name to amend its mortgage borrowing policy, following calls for the industry to do more to help borrowers who struggle to get a home loan because of their age, but can easily afford to pay it.

Halifax has also upped its age limit on mortgage borrowing by five years from 75 to 80.

Meanwhile Hodge Lifetime launched a new interest-only over 55s mortgage deal back in April that allows you to borrow up until the age of 95.

When considering taking out a mortgage later in life there are a few things you should consider.
First off, your ability to save will be impacted.

Paying off your home loan up to and beyond retirement may mean you have less money to set aside for a rainy day or to put away for your retirement.

Also the amount of inheritance you leave loved ones could be impacted.

That’s because you may not be able to pay off the loan before you die. The bank may force your family to sell off the house to repay the debt, leaving them with less or nothing after you are gone.

Other issues that may come up include your ability to pay for care: with less savings you might be forced to sell your home in order to keep up with the bills.

If you need to borrow into, or in retirement, here is a rundown of banks and building societies that currently have the highest age thresholds.

Bank/ building society with Upper age limit on mortgage borrowing
National Counties 89
Halifax 80
Nationwide 75 (85 from July)
Santander 75

Remember whichever lender you go for and no matter your age you will need to prove that you have enough income to repay your loan.

If you’re struggling to get a mortgage or remortgage because of your age, there are some other options you could look at.

For example, you might be better off going for an equity release mortgage.

The most common type is the Roll Up Lifetime Mortgage. These can release a lump sum from your property, which is repaid when you sell your home or die. However, the interest charge is added to your debt, which will eat into how much of your home you own and the longer you live in the property the more you will have to pay back.

Another type is a Home Reversion Plan, which involves selling a percentage of your property in exchange for a single lump sum, but keeping the right to live in your home rent free. However, one downside is that you won’t feel the full benefit if your property increases in value as the lender will get a percentage of the profit rather than a fixed sum.

There are also products called Home Income Plans which involve selling a share of your home and exchanging the cash from that into an annuity, which pays an income for the rest of your life.

You should take independent financial advice before making this decision to use an equity release mortgage.

Another route you could try is to take out a secured loan on your property, which might have more flexible criteria for lending. As with equity release you’ll need equity for a secured loan to work.

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Written by: Houseladder