Britain’s biggest building society is increasing its maximum age for mortgages to 85, to meet a “growing demand” from customers to borrow later in life.
Nationwide Building Society has previously had a maximum age limit of 75 in place for mortgage maturity but it will increase this by ten years from July as part of wider efforts to offer borrowers greater support in retirement.
The move comes as Halifax increases its age limit for mortgages from 75 to 80 from today.
Nationwide said the change would enable existing customers with retirement income to borrow up to the age of 80, with a maximum age at maturity of 85. This could enable pensioners to borrow to move house or meet other needs.
The option will be available on all standard Nationwide mortgage products up to 60 per cent loan-to-value (LTV) and with a maximum loan size of £150,000.
In February, Nationwide simplified its approach to assessing retirement income, and it now uses the customer’s anticipated retirement age rather than the state pension age, up to a maximum age of 70.
Henry Jordan, Nationwide head of mortgages, said: “These customers are often asset rich, with significant equity in their home, and they wish to have the flexibility to borrow against it. Access to the mainstream market has been a challenge for older customers, resulting in their needs going unfulfilled. This measure helps to address these needs in a prudent, controlled manner.”
Last week, Halifax – which is part of Britain’s biggest mortgage lender, Lloyds Banking Group – announced plans to change its mortgage rules, meaning that for new mortgage applications the term would be allowed to run until the borrower’s 80th birthday.
Halifax said the move was a response to changing demographics, with people living and working for longer.
There have been calls for lenders to do more to help older borrowers and lenders have varying rules in place when it comes to mortgage lending and age limits.
Metro Bank has no age cap for residential mortgages –but borrowers still have to go through the standard checks to make sure they can afford their mortgage.
Santander has a cut-off at the age of 75 for mortgages, while for RBS the age limit is 70.