Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.
Older borrowers underestimate mortgage options, Suffolk BS research finds
Nearly two-thirds (64%) of brokers believe older borrowers still think all lenders impose age restrictions, according to research from Suffolk Building Society. The survey also found 57% of brokers said older borrowers believed their age would work against them, leading many to assume equity release is their only option.
Widespread misconceptions
The research suggests borrower perceptions have not kept pace with developments in the mortgage market. Some 54% of brokers said older borrowers were unaware of the different means of proving affordability.
Charlotte Grimshaw, head of intermediaries at Suffolk Building Society, said borrower perceptions have not yet caught up with innovations in the market, and urged brokers to bridge this knowledge gap. She noted that being over 55 is not, in itself, a barrier to borrowing, and that older borrowers could in some cases be more reliable borrowers. Over half of Suffolk Building Society's applications come from over-55s.
Demand for later life lending
Despite these misconceptions, demand for later life lending remains strong: only 3% of brokers reported a decline in enquiries from older borrowers. The most common reason older borrowers seek later life lending is reaching the end of a mortgage term without being ready to repay the outstanding balance, cited by 66% of advisers. This was followed by remortgaging an existing mortgage and raising money to help family members, such as through gifted deposits, both cited by 47%.
What this means for agents and clerks
For letting agents and inventory clerks, the findings point to a growing later life lending market that may shape the tenant and landlord profiles they encounter. With older borrowers raising funds to help family members, including through gifted deposits, advisers' conversations around later life lending could influence first-time buyer activity in the rental market. Grimshaw encouraged brokers to start conversations about later life lending early, explain how lenders assess retirement income and other assets, and help older clients understand they may have more options than they realise.
Source: Mortgage Solutions