Lenders focus on younger borrowers.
Mortgage customers over 65 find it significantly harder to get the mortgage they want compared to younger borrowers, according to the latest Mortgage Broker Tools (MBT) Affordability Index.
With the number of people in the UK aged 65 and over soon expected to surpass the number of those who are 18 and below, the latest MBT Affordability Index shows that only 37% of potential borrowers in this age group are offered the loan size they request, compared to 75% of younger people.
MBT reported that the number of customers aged 65-plus who were offered a loan size smaller than they requested was 28%, compared to 24% for those under 65.
This is despite the lower average loan requests from people aged 65 and over. In March this year, the average loan requested by older borrowers was £100,000, compared to an average of £216,750 for those below the age of 65.
The number of customers for whom no lenders are able to offer a mortgage of any size is also much higher for people aged 65 and over. For March 2022, the proportion of loan enquiries where no lender was able to lend was 35%, up from 26% in January. This figure reached a high of 68% in December 2020, compared with lows of 18% and 17% in January and February 2020.
However, the percentage of cases where no lender is able to lend drops to just 6% for over-55s and falls further again to 1% of enquiries from customers aged under 65, a figure that has remained largely steady since summer 2020.
Tanya Toumadj (pictured), chief executive at Mortgage Broker Tools, pointed out that the focus is often on younger borrowers and, in particular, first-time buyers. She, however, said that there must be a well-functioning housing market at all stages.
“While age can be a concern for what is fundamentally a long-term commitment, it is just not that simple. The mortgage market needs to focus on the individual, and in doing so provide a more certain landscape for borrowers who might present just as strong a lending option as many of their younger counterparts,” Toumadj said.