Devonshire Wealth Management is a boutique London-based wealth and asset management firm. They offer bespoke advice to clients with whom they nurture and value long-standing relationships. Central to Devonshire Wealth Management’s approach is taking time to understand what clients want out of life and how to meet their desired financial goals. They use state of the art technology to help guide people through their financial journey.
Mortgage in maturity
Since last May’s General Election, the housing market in the UK has shown positive signs of improvement and mortgage lenders are increasingly willing to approve requests. Rates are at a historic low led by the Bank of England’s Base, which is forecasted to remain below 2% for the next ten years.
The challenge to borrow beyond the age of 65
But, unfortunately, it’s not all rosy on the borrowing front. As people live and work longer, the effects of age discrimination are being felt far more keenly by homeowners.
Many banks still refuse to lend to customers beyond the age of 65, even if they are in stable employment. A handful of lenders have extended the limit to 75 and more are following suit, but not enough to meet the demand or change the landscape significantly.
It’s now been reported that people as young as 40 are also finding it difficult to secure a new mortgage deal, despite not wishing to increase the size or length of their loan. This can stifle life plans at what should be an affluent and potentially liberating stage of life.
How to navigate the age limit
If you are still working when you reach the stipulated age limit and are not in a position to repay your mortgage balance by 65, there are a handful of options. The first is to sell your property and downsize, which is a costly process in itself and could be a heart-breaking necessity. The second is to re-mortgage on a 5-10 year repayment-only term mortgage, if available. Lastly, borrowers have the option to release equity from their property in order to finance the debt.
There are many who consider this standard unacceptable and even stifling for an entire generation. Dr Ros Altmann, Minister of State for Pensions, is one such figure. She is an ardent campaigner against mortgage age discrimination, recently accusing banks of treating older people like “third class citizens” by refusing to give them mortgages on grounds of age.
Although there is some sign of movement in the market in favour of older borrowers, we believe more needs to be done to help people foresee and navigate specific mortgage requirements in later life. Better still, we would like to see banks increase the age limit on mortgages to align them with increasing retirement age and higher life expectancy.
In the meantime, we encourage our clients and indeed anyone who may be facing these challenges, to discuss their situation with a professional financial advisor. The sooner this can be done, the better, so as to avoid having to make some potentially difficult decisions as a homeowner.
The Devonshire Wealth Management Team
Jackie Cleary, Jeremy Willsher, Martin Cawley, Nicholas Townsend and Claudia Alves
please call 020 7637 0666 or email at email@example.com