Lenders will be taking candy from kids, next

You are as old as you feel, they say.

And I imagine that pensioners who are still paying their mortgages off feel a lot older than those who have paid off that particular debt and only have to worry about stretching their pensions to meet rising Council Tax and fuel bills.

But sub-prime len-der Advantage, one of Morgan Stanley’s companies, has other ideas. It has opened its doors to borrowers aged over 65 and hopes other lenders will copy its move – I don’t think it will be disappointed in that regard.

It does sound like a win-win situation for a lender. If the borrower dies before paying off the loan, the lender can get its money back from the house sale. In a rising housing market there doesn’t seem to be an obvious downside.

But why stop there? Surely there is a market for mortgages at the other end of the generational scale as well.

The Baby Mortgage, the Toddler Mortgage and the School Kid Mortgage all have huge potential.

We’re told that children are growing up fast these days, so why not give them a bit of extra responsibility? They can only make a better hash of it than their debt-ridden parents. The youngsters could start with a loan secured on their play-pen, trade up to a Wendy house and maybe expand to a tree house as the gang gets bigger.

They’d be on the housing ladder before they get out of primary school and the problems we hear of concerning cash-strapped 20-something first-time buyers would disappear.

I can already hear a few cynics grumbling about encouraging debt at an early age. But I say, get a grip. Student loans and our have-it-all now culture have been doing that for years.

Granted, the proc fees on a playpen loan would be peanuts but there’s scope for some juicy business. The latest Harrods Christmas catalogue has playhouses at around 40,000. And think of the payment protection insurance potential.

Perhaps the brokers wouldn’t want to do this business – proc fees or not. Taking Advantage (the pun is intended) of the very young or old may not appeal. The loans are likely to be priced for risk so granny and junior will have to pay through the nose for their deals.

But Keith Dearling, managing director of Advantage, claims his ideas come from “listening to our introducers’ needs” so there must be some brokers out there who are happy, even desperate, to lend to the over-65s.

And those that are happy to profit from granny’s financial struggle are unlikely to have any difficulties when it comes to taking candy from babies.