Pensioner Age of 102 Receives A 25 Year Mortgage!

Published 11th Jul 2007

FancyAMortgage highlights the new discrimination laws which mean mortgage lenders are not able to discriminate on the grounds of age. A recent example of the current reaction to this legislation was where a pensioner aged 102 years was able to obtain a twenty-five year mortgage.

In fact, it appears worse than that, as the pensioner in question took out an interest only mortgage on the property. The £958 that he will have to pay on a monthly basis to cover this mortgage will be achieved by renting out the property. This has resulted in a whole new breed of buy to let owners.

With the new requirement that lenders cannot discriminate against older borrowers, it is now possible for those who have retired to obtain a buy to let mortgage in order to finance their retirement. Currently, most lenders remain reluctant to lend money to anyone over the age of seventy-five. It is not clear how many lenders are now revising this policy in line with age discrimination legislation.

Bristol & West and Woolwich have been amongst the high street lenders to embrace this new breed of investor and have opened their doors to borrowers of any age looking for a mortgage quote, provided, of course, that they meet the financial requirements. Independent advisors are recognising that this could be a whole new dimension to the property market. However, it is also clear that there are greater risks involved in lending to retired individuals. This is because these individuals are relying entirely on the rental income. This does not technically have anything to do with age, as many investors of all ages rely entirely on rental income.

FancyAMortgage spokesman Paul Giles “Anyone involved in the mortgage industry needs to be aware of the types of behaviour that could be seen as discriminatory including brokers, lenders and landlords”

Those within the financial sector of the property industry have to be particularly cautious about discrimination. Most lenders will have stringent sets of requirements and these are not generally considered discriminatory. It has recently been decided that having cheaper introductory rates for new borrowers is not considered discriminatory. However, lenders are now paying particular attention to their products making sure that they offer a suitable range of products that cannot be considered to marginalise any sector of society based on race, sex, age or disability.

Source: ' 'E Business Engineers' '

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