Mortgage choice significantly reduces for over-65s, research finds

Mortgage customers over the age of 65 are finding it significantly harder to get the mortgage they want compared to younger borrowers, according to the Mortgage Broker Tools (MBT) Affordability Index.

With the number of people in the UK aged 65 and over soon expected to surpass those who are 18 and below, MBT’s latest index has revealed that just 37% of potential borrowers in this older age group are offered the loan size they request – compared to 75% of younger people.

The number of over-65 customers who were offered a loan size smaller than they requested was 28%, compared to 24% for those under 65.

This is despite lower average loan requests from people aged 65 and over. MBT’s data shows that in March this year, the average loan requested by older borrowers was £100,000, compared with an average of £216,750 for those below the age of 65.

“As a culture, we often focus quite heavily on younger borrowers, and in particular first-time buyers,” said Mortgage Broker Tools CEO, Tanya Toumadj. “However, we need to have a well-functioning housing market at all stages.

“It is also worth noting that we have an ageing population, with the number of people aged 65 and over soon expected to outstrip those 18 and below in the UK. This is a growing demographic, and they do not fit into a simple box, with many opting to work steady jobs for longer, for example.”

MBT’s index also revealed that the number of customers for whom no lenders can offer a mortgage of any size is also much higher for people over the age of 65. During March, the proportion of loan enquiries where no lender was able to lend was 35%, a level up from 26% in January. This figure reached a high of 68% in December 2020, compared with lows of 18% and 17% in January and February 2020.

However, the percentage of cases where no lender was able to lend dropped to just 6% for over-55s and fell further again to 1% of enquiries from customers aged under 65 – a figure that has remained largely steady since summer 2020.

Toumadj added: “While age can be a concern for what is fundamentally a long-term commitment, it is just not that simple. The mortgage market needs to focus on the individual, and in doing so provide a more certain landscape for borrowers who might present just as strong a lending option as many of their younger counterparts.

“This is where technology can help, with research platforms like MBT empowering brokers to carry out an in-depth search across many dozens of lenders to ensure they are sourcing the best affordability option for their clients.”

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