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Mortgage that lasts until you're 80: Tiny Mansfield Building Society lifts restrictions on older borrowers

Holly Black for the Daily Mail

Mansfield Building Society has become one of the first lenders to lift restrictions to older borrowers

Mansfield Building Society has become one of the first lenders to lift restrictions to older borrowers

Tiny Mansfield Building Society has become one of the first lenders to lift restrictions to older borrowers.

Last week Britain’s building societies promised a shake-up of rules for retired homeowners considering downsizing.

Thousands of older people are trapped in large family homes they no longer want or need. But strict lending criteria by mortgage providers has shut them out of the home loans market.

Building societies are said to be reviewing lending criteria and could soon be offering mortgages to customers which extend into their 80s and 90s. 

Mansfield BS has launched an interest-only mortgage for retired homeowners looking to downsize.

The deal is available for those aged up to 80, with a fixed rate of 3.19 per cent for two years.

Customers are then moved to the standard variable rate, which is currently 5.59 per cent.

There is an application fee of £199 and a further completion fee of £800. Homeowners must have at least £150,000 equity to qualify for the loan, and must have a deposit of at least 60 per cent.

Loans must be between £25,000 and £300,000. The deal is available only through mortgage brokers.

For those retirees who are able to meet lending criteria, HSBC has a two-year discounted variable rate deal at 0.98 per cent with a £1,499 fee for borrowers with a 60 per cent deposit. 

For those with a 40 per cent deposit it offers a five-year fixed deal for 2.19 per cent with fees of £999. Other providers, including Nationwide and the Yorkshire, could soon follow suit. 

MORTGAGE LENDING AGE CAPS 

Most lenders will consider lending beyond a maximum age on a case-by-case basis.

The policies of the biggest lenders are:

Royal Bank of Scotland

Income will be assessed after age 65 up to age 70

Santander

Maximum age of 75

Lloyds Banking Group

Maximum lending age of 75 across Halifax, Lloyds TSB and Bank of Scotland

HSBC

Maximum age of 75 for capital repayment loans and 65 for interest-only. Will consider extensions

Barclays

Maximum age of 70, consideration will be given to extend the mortgage term beyond the maximum age, however evidence of how the applicant intends to repay the mortgage in retirement. 

 

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