40 - You may be too old for a mortgage

Posted by Neil Greenhill in Mortgages on 26 February 2016 - Neil is a Senior Credit Analyst at checkmyfile

Experts are warning that borrowers as young as 40 are struggling to obtain a mortgage due to their age.

Lenders have traditionally seen older borrowers as risky, due to impending retirement. However, with house prices increasing those in their early 40’s are looking to extend their mortgage period beyond the traditional 25 years. The problem being many are finding they are considered too old by mortgage providers as they will hit retirement before the end of their mortgage term.

A recent survey of customers showed 17% had been declined due to their age, rising to 21% of those in the 45-54 age bracket. A quarter of those turned down said it was because they were too old for a mortgage with a long term, while the rest said that they or their partner was considered too old.

Further evidence comes from a Nottingham Building Society study that shows 37% of brokers have seen an increase in customers being declined when looking to mortgage or re-mortgage properties.

Another group of older borrowers hard hit are those with interest-only mortgages. It is estimated 425,000 interest-only mortgages are due to mature in the next 5 years; many will belong to those in their 50s and 60s. Customers on these mortgages repay the capital at the end of their deal. Many may find they won’t have sufficient capital and when they go to extend their mortgage term they may find they are rejected on the basis of their age.

In a recent case Co-operative bank was forced to pay £2,000 compensation to a 69 year old borrower who had been told he couldn’t extend his mortgage by 5 years. The ruling was made by the Financial Ombudsman which has forced the Co-operative ban to change its policy.

The Financial Conduct Authority is now launching a review into financial Age discrimination – a large part of this will focus on the problem of older borrowers being rejected for a mortgage. The FCA has voiced concerns that older borrowers may be falling victim to a more risk averse mortgage industry.

Check Your Multi-Agency Credit Report

30 Day Free Trial

How your credit file could help you get a good mortgage deal

How to use your credit report to get a great mortgage deal in 2019

There have been plenty of reasons to get people thinking about making that first leap onto the property ladder in recent months, including Help to Buy schemes, the removal of stamp duty charges for about 95% of first time buyers and an increase in affordable houses being built.

Published on 20 Nov 2018 by Kiah Phillips

Full Article

Why Mortgages Might Be Agreed In Principle Then Declined

Getting your mortgage Agreed in Principle (also known as a Decision in Principle or AIP) is an important step towards finally getting into a new home, but the relief of getting an AIP can be short-lived if you then get turned down when applying for the actual mortgage.

Published on 29 Oct 2018 by Jamie Mackenzie Smith

Full Article

Am I More Likely to Get a Professional Mortgage?

Before the Credit Crunch of 10 years ago, finding a mortgage valued up to 95% or even 100% LTV and at more than five times your salary level wasn’t difficult - in fact it’s since become clear that it was too easy and was a financial disaster waiting to happen. As such, mortgages have become harder to get accepted for then, with stricter regulations coming into place ensuring that mortgages are only granted to those who can truly afford them.

Published on 14 Sep 2018 by Jamie Mackenzie Smith

Full Article

The best credit score for a mortgage

A lot of customers come to checkmyfile because they plan on applying for a mortgage – your Credit Report is, after all, the best place to start as it’s helpful on more than one occasion. But often the question is often raised: "what Credit Score will I need to get a mortgage for my dream home?”

Published on 8 Aug 2018 by Jamie Mackenzie Smith

Full Article

Last minute mortgage checks

When could a non-bankrupt person be considered bankrupt? When they’re buying a house.

Published on 17 Jan 2018 by Richard Catlin

Full Article

Guarantor loans can affect mortgage applications, lenders warn

Guarantor lenders are always keen to point out that you don’t need a credit report check to get their loan, just a friend or family member who has a good credit history and is able to act as a guarantor. For those with a poor credit rating, this type of loan provides a solution to a problem – they can afford the loan repayments but are unable to get credit due to prior adverse credit history.

Published on 9 Jan 2018 by Kelly Luff

Full Article

Homeownership among 25 year olds halved in 20 years

Homeownership among 25 year olds has more than halved in the last 20 years, according to a survey conducted for the Local Government Association (LGA). The study carried out by Savilles the estate agents found that only 20% of 25 year olds now own a home of their own, compared to 46% in 1996.

Published on 5 Jan 2017 by Erika Bone

Full Article

Housing Values Rise to 5.6 trillion

While housing prices have displayed a consistent rise over the past several years, according to a recent study conducted by Halifax, the total value of privately owned housing in the UK has exceeded £5.5 trillion for the first time.

Published on 14 Dec 2016 by Tom Magor

Full Article

First-time lenders can borrow against parent's home

In recent decades, the “bank of mum and dad” has increasingly become a cardinal resource for their offspring achieving independence and for first-time buyers attaining a foot on that all-important first rung of the property ladder.

Published on 9 Dec 2016 by Erika Bone

Full Article

Buy to let slows as mortgage rate offers begin to increase

In the last few years we have not only seen some historically low mortgage rates, but also a rush to make property investments. Now the tide may finally be turning, as lenders begin to increase their lowest mortgage rates, and buy-to-let figures drop in the wake of new regulations.

Published on 7 Dec 2016 by Kelly Luff

Full Article


We are rated number 1 for customer service on