Halifax to raise maximum age limit


Halifax is increasing its age cap from 75 to 80 from 9 May.

A Halifax broker note says the age rise will apply to all mortgages, new applications, further advances and product transfers.

The terms must end before borrowers’ 80th birthday.

For joint applications, the rule will continue to apply to the oldest applicant.

Halifax says its affordability calculations will be changed to reflect the new maximum age and that any borrowing beyond retirement age will need evidence of retirement income.

Last week brokers hit out at banks for their stances on lending to older borrowers after figures showed half of all building societies had maximum age limits of at least 80.

HSBC, Nationwide, Santander and Virgin insist that the borrower repays their loan by the time they are 75. Barclays and RBS have a maximum age limit of 70.

But 22 building societies now lend up to 80 or 85, or have no age limit at all, with six having loosened their criteria in the past six months.

The Building Societies Association notes that 10 of its members do not have any age limits on lending and it says it is expecting more to ease their criteria this year.

The upper age limit change is Halifax’s second tweak to its lending into retirement policy in two weeks.

On April 22 the lender relaxed the way it treated income for older borrowers.

Previously, Halifax used earned income for affordability up to the state pension age, then relied on pensions or other retirement income beyond that, up to a maximum age of 75.

The current maximum state pension age is 65, for someone retiring now. This will increase to 67 between 2026 and 2028. Beyond that the pension will be based on life expectancy. The state pension age is reviewed every parliament.

The state pension age is 65 for men and almost 63 for women. Both men and women will get their state pension at 65 in 2018, and at 66 by 2020.

But now Halifax uses earned income for affordability up to 70.

If the mortgage term goes past 70, or the borrower’s state pension age, whichever is sooner, Halifax will continue using ‘verifiable anticipated retirement income’ in its affordability assessment.

The lender is also changing some of its new build criteria.

The broker note says Halifax is reinstating Buildzone as an acceptable warranty provider.

Halifax is also adding Assure Build, Global Home Warranties, International Construction Warranties, Advantage HCI and Protek to its list of warranty providers.

A Halifax spokeswoman says: “As demographics and working habits continue to change, we continually review our products and policies to ensure they reflect the evolving needs of our customers, including those who wish to continue working longer‎.”