More mortgages available into retirement
Posted in May 2022
As the average age of first-time buyers is getting older, more borrowers are looking to take out mortgages that will run into their seventies
NatWest has recently announced that it will be joining other leading lenders in offering homeowners mortgages that will last until their seventies. 40-year mortgage terms, that have been extended up from 35 years are now being allowed by the bank, in addition to a loan up to the age of 75 as long as the applicant is still working.
The Halifax and HSBC are allowing loans that will last until the age of 80. Currently, the state pension age is 66 and will be rising to 67 by 2028.
As house prices continue to soar, some first-time buyers have needed to take out longer loans to keep their monthly repayments down. The percentage of 40-year mortgages has been rising steadily from 36% in 2014 to 59% in 2022, according to recent research from the data firm Moneyfacts.
As it can now take longer to save up for a deposit, first-time buyers are also getting older. In 2021, the average age of a first-time buyer was 32 according to the Halifax, which is up from 29 back in 2011.
Which means that increasingly more borrowers are taking out mortgages that will run until they are at least 72 years old.
NatWest commented “We recognise that many customers don’t stop working when they reach state retirement age. These changes allow more choice and flexibility for our customers”.
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