What is a normal retirement age for mortgages?

You may have seen the Citizens Advice Bureau release research estimating that nearly 1 million people have an Interest Only mortgage with no obvious way of repaying it.  This means that come normal retirement age, the lender has the right to request repayment of their loan.  If the customer has no way of repaying this and has just continued to pay the interest over the last twenty five years, they face having their home repossessed or being forced to move out.  On the high street, the end of the loan term will normally hit those aged between 65 to 70.  This is not new news, but does highlight that people are still burying their head in the sand and hoping this will go away or the lender may be lenient.  No chance on either.  You may get a years extension, but the lender will want their money back and that you cannot avoid.

However, there are a number of lenders that recognise that 'normal retirement' age is no longer set in stone and people continue to work long in to later life.  Many will consider loans ending at the customers age of 80 (maybe to 85) and on a repayment basis, so no loan outstanding at the end of the term.  This is all subject to affordability and will depend on the loan size compared to the value of the property.  These are also not high street names and as such, rates may be slightly higher than the big super tanker, large volume producing household names that we are used to.  But at least they will consider helping out and could keep you in your home!

This also runs in line with recent reports that the top six lenders in the UK are losing market share to the smaller lenders.  Virgin Money, Skipton and Coventry have all posted figures with a year on year increase in excess of 25%.  But where the smaller lenders are really winning is the ability to think outside the box and in some cases, manually assess your application with no credit scoring.  The smaller lenders can be more innovative and change things quickly to suit market conditions and to attract new business.  Don't be shy of a non household name, they could very well be the best lender for your next mortgage move..