You’re never too old for a mortgage. At least in Britain, that is.
Two of the U.K. biggest lenders are now offering mortgages to people who will be in their 80s when the loan is due to be repaid. One of them — Nationwide — is even offering people who are 80 the chance to take out a new mortgage, provided they pay it back by the time they’re 85.
The changes reflect Britain’s aging population and rocketing house prices. Between 2015 and 2020, the number of people aged over 65 is forecast to rise by 12%, compared with a 3% increase in the population as a whole. People are working for longer before they retire, and as house prices rise, first time buyers are having to save longer for down payments. Halifax, the biggest mortgage lender in the U.K., last week set a new maximum age on its mortgages of 80, up from 75. The lender, which is part of the Lloyds Banking Group (LYG), said the change is due to later retirement ages now common in the U.K. Nationwide followed on Monday, announcing it was raising the age limit to 85 years old. It will also allow 80-year olds to borrow up to £150,000 ($216,000) provided it’s paid back within five years.
“Access to the mainstream market has been a challenge for older customers, resulting in their needs going unfulfilled,” said Henry Jordan, Nationwide’s head of mortgages. Both lenders impose additional conditions on older clients. Halifax and Nationwide will only lend to borrowers who can prove that the loan will be no more than 60% of the value of their home. House prices in certain parts of the country, especially in London, are rising rapidly. Halifax said prices were up 9% in April compared to the same month last year, with average house price across the U.K. hitting £212,321 ($307,000).
The average house price in London reached £534,785 ($774,500) in March.