Almost two-thirds of brokers believe older borrowers still assume all mortgage lenders impose age restrictions despite growing demand for later life borrowing.
Research from Suffolk Building Society found 64% of intermediaries believed over-55s continued to think all lenders restricted borrowing based on age.
It comes as 60% of brokers reported an increase in later life mortgage enquiries during the past 12 months, compared with just 3% who had experienced a decline.
Suffolk said half of the mortgage applications it now receives are from borrowers aged over 55.
LATER LIFE DEMAND GROWS
Reaching the end of an existing mortgage term without being ready to repay the balance in full was the most commonly reported reason for later life borrowing, cited by 66% of brokers.
Remortgaging and raising money to help family members, such as providing a gifted deposit, were each cited by 47%.
A further 43% reported clients borrowing for home improvements or debt consolidation, while 31% pointed to life events such as divorce resulting in borrowers needing a mortgage over a longer period.
BORROWERS UNDERESTIMATE OPTIONS
Despite the increase in enquiries, brokers reported widespread misconceptions among older clients about their borrowing options.
Some 57% said older borrowers believed equity release was their only option, while 55% had dealt with clients concerned about whether they could obtain a sufficiently long mortgage term.
More than half – 54% – said older borrowers were unaware of the different ways affordability could be evidenced, including through pension and investment income.
“Perceptions have not kept pace with the innovation.”
Charlotte Grimshaw (main picture), head of intermediaries at Suffolk Building Society, said: “Borrower perceptions have not necessarily kept pace with the innovation we’ve seen in the mortgage market.
“If many over-55s still assume their age will count against them, then now is the time for brokers to challenge those outdated views and help clients understand the options widely available.”
‘START THE CONVERSATION’
And she added: “Rather than waiting for older borrowers to rule themselves out, brokers can start the conversation about later life lending, explain how lenders assess retirement income and other assets, and show that being over 55 is not, in itself, a barrier to borrowing.
“In fact, some older borrowers may present a more reliable lending proposition than they realise and a valuable revenue stream for brokers.
“Borrowing later in life is increasingly becoming the norm – half of our applications now come from people aged over 55 – and the reasons for doing so are as varied as the borrowers themselves. For brokers, that presents multiple possibilities.
“By helping older clients understand that they may have more options than they realise, and that age alone does not have to stand in the way, brokers can build stronger relationships, tap into a growing area of the market, and feel good about what they’re doing at the same time.”
