Vida has revised its later-life mortgage criteria to give brokers clearer guidance when arranging loans that extend into a borrower’s retirement.
The specialist lender’s Next Chapter Lending proposition is aimed at later first-time buyers, homeowners moving in their fifties and customers seeking to remortgage during retirement.
Vida said the changes reflected the growing number of people buying their first home later in life or retaining mortgage commitments after leaving work.
Under the revised criteria, lending into retirement is defined as a mortgage whose term extends beyond the customer’s expected retirement age or their 76th birthday, whichever comes first.
AFFORDABILITY ASSESSMENTS
For customers who are within 10 years of retirement, affordability will be assessed using the lower of their current earned income or projected retirement income.
Current income may be used for customers with more than 10 years until retirement, provided they are making active pension contributions.
Where more than 50% of the mortgage term falls within retirement, affordability will be based on the lower of current or projected income. Mortgage terms must end before the customer reaches the age of 86.
The proposition is intended to cover later first-time buyers entering the market in their forties or fifties, borrowers aged over 50 who want to move to a long-term home and retired homeowners seeking to remortgage.
Vida said the latter group could include customers raising money for home improvements or adaptations, helping family members financially or managing household costs during retirement.
Ross Williams, head of mortgage product management at Vida, said: “Homeownership journeys are becoming increasingly diverse, and borrowers’ needs are evolving far beyond traditional life stages.
“Our enhanced Next Chapter Lending proposition builds on the flexible criteria we already offer, including solutions such as Joint Borrower Sole Proprietor, to help more people access and sustain homeownership.
“By providing greater clarity around lending into retirement and recognising a range of income sources, including pension income, we’re giving brokers more confidence when supporting customers whose mortgage needs extend beyond their working lives.
“Whether it’s a first-time buyer purchasing later in life, a family using additional income to support a loved one onto the property ladder, or a borrower planning confidently for retirement, our aim is the same: to give brokers the tools, certainty and flexibility they need to help more customers find a place to call home.”
