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Elderly locked out of market as Leeds pulls its 80-plus mortgages

Mortgages for people over 80 have become extinct following Leeds Building Society’s decision to stop lending to 85 year olds last week.

Leeds was the last lender to offer mortgages to those aged 85 but it has now reduced its age limit to 80, with the maximum age at application set at 70.

If the loan term extends into retirement, an additional affordability assessment may be required, based on expected retirement income.

The society is offering a specialist range of mortgages for borrowers aged more than 65 at the end of the mortgage term and these borrowers will not be able to apply for the society’s standard product range.

Matt Sutton, managing director of Emerald Finance, says lenders are pulling out of this market because of proposals included in the Financial Services Authority’s Mortgage Market Review.

The regulator has said it does not want to restrict lending into retirement but has raised concerns about the checks lenders have been carrying out to assess the viability of borrowers over 65.

Sutton says: “This move further reduces the options for those in retirement and further tightens the noose around the marketplace for those with good pension incomes but mortgages still in place.

“We meet countless clients who have a small but affordable mortgage but are being forced to downsize because they don’t want to take out an equity release scheme and can’t secure finance because lenders will not lend to their age group.”

He says with people living and working longer this is likely to be an increasingly important issue and the FSA needs to support those who responsibly lend into retirement.

Leeds also made changes to its interest-only criteria last week.

It has decided it will no longer accept inheritance as an acceptable repayment strategy for interest-only loans.



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  • Steve Lupton 6th September 2011 at 9:50 am

    This situation cries out for more innovation from providers of equity release products, however first and foremost support from the both the regulator and the government for both the providers and the advisers is needed to give those in retirement options on how they wish to provide for themselves at this time in their lives.