Last month, while there was at least one lender able to meet the loan requested by 75% of mortgage customers across the whole of the market and 70% of self-employed customers, only 64% of customers aged 55 and over had at least one option for affordability, according to the latest findings from MBT Affordability.
The MBT Affordability Index found that almost 9% of customers aged 55 and over were unable to secure a suitable mortgage of any size, compared to 2% of the self-employed.
The spread of loan sizes available to customers aged 55 and over was also larger than the spread available to the whole of the market and to the self-employed.
The largest loan available to an average customer aged 55 or over was £287,540 while the smallest loan was £147,372 – a spread of £140,168. This compares to the largest loan available to a self-employed customer of £231,206 and the smallest loan of £110,552 – a spread of £120,654. For the whole of market, the largest loan available to an average customer was £245,890 and the smallest loan was £145,742 – a spread of £100,148.
Tanya Toumadj (pictured), CEO at Mortgage Broker Tools, said: “The latest MBT Affordability Index shines a light on the challenge that mortgage customers aged 55 and over face in securing the loan size they want. There are a lot of different factors at play here. Obviously maximum age at the end of the mortgage term, and anticipated retirement age play a significant role in how much customers will be able to borrow and lenders often have different criteria in these areas, but there are also other considerations.
“As customers grow older, in general, they also become wealthier and many will have additional sources of income to consider from investments and pensions. There’s a huge variation in the way that lenders underwrite these additional income sources and it means that the choice of lender can make a very significant difference to how much a customer aged 55 or over is able to borrow.
“We have spoken before about the importance of whole of market research and it’s even more apparent for this group of customers. Every broker in the country will have a number of clients who are aged 55 or over and, if they are not using technology to research all of the affordability options, they are not giving their clients the strongest chance of achieving the loan they deserve.”
