Halifax is imposing a new 70-year age limit on thousands of homebuyers as banks seek to rein in risky mortgage lending.
The lender is reducing the maximum age at which it will allow many borrowers to say they intend to retire from 75 to 70 – meaning that in many cases it will not lend to someone older than this limit.
The Telegraph says it risks forcing thousands of borrowers to reduce the length of their terms in future, increasing their monthly mortgage payments as a result. The changes are likely to particularly affect people in their 40s and 50s seeking to maximise the length of their loan.
Darryl Dhoffer, an adviser at The Mortgage Expert, said: “Halifax appears to be tightening the screws on the very borrowers who need them the most.”
Mortgage lenders will typically only allow a borrower to take out a loan for as long as they intend to work, and will ask for a proposed retirement age before making an offer.
Borrowing longer than this limit requires extensive checks on whether a future pension will cover the costs.
Halifax’s decision means in many cases, the bank will only accept that someone can work until the age of 70, reducing the maximum amount of time they can borrow money for by five years.