Too old for a mortgage?

26 February 2018
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Moneywise helps a reader whose uncle has been threatened with repossession of his home. 

My uncle is 72 and has ended up in a punch-up with his mortgage provider. He has never defaulted on a loan and can demonstrate that he can easily afford to continue to pay a mortgage. However, the term of his interest-only mortgage is up on his home in Maidenhead and the bank wants him to clear it. He went into a branch to propose an extension, but it refused.

Now the bank has begun the process of repossession, sending my uncle an alarming and threatening letter. Our lawyers are involved, but the whole thing has become needlessly stressful. Can you help us resolve the situation?

AW/Devon

I suspect your uncle isn’t the only person in this situation. The latest figures suggest that around 1.9 million people have an interest-only loan and mortgage rule changes that came into force in 2014 have meant that lenders are much tougher on these borrowers.

For younger borrowers with a fairly long term still left on their mortgage, switching to a repayment mortgage – and at a stroke reducing the interest-only risks – is an obvious solution.

Older borrowers with shorter mortgage terms don’t have that opportunity as repayments would rocket to ridiculous levels.

I haven’t named the lender involved here as I’m still negotiating with it, but for anyone in ˙a similar position I would advise approaching a local building society to see about switching mortgages. In fact, I have put AW in touch with one society, which says it should be able to help him.

That’s because the smaller lenders still seem keen to try and help borrowers, while large high-street lenders close their books to all but the most straightforward of loans.

For others facing the same position, there are 14 building societies that have no age limit for borrowers. They are Bath, Buckinghamshire, Cambridge, Chorley, Cumberland, Dudley, Family, Harpenden, Holmesdale, Leek United, Loughborough, Monmouthshire, Saffron and Vernon.

OUTCOME: Building society steps in to help. 

 

In reply to by anonymous_stub (not verified)

that so called bank should be named and shamed.nothing has changed has it with the highway robbery of the banks.

In reply to by anonymous_stub (not verified)

Is your advice any different where an interest only BTL mortgage is involved. I have a modest one with RBS but they only go up to age 70. Tax wise not a good time to pay off.

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