Building societies buck the trend in offering mortgages to older people

Paul Lewis / 18 February 2015

Paul Lewis explains how smaller building societies are bucking the trend set by the bigger banks by offering mortgages to people aged 65 and above.

A Saga Magazine item about the Teacher’s Building Society offering a mortgage to teachers aged up to 70, which could run to the age of 83, has led to other small building societies pointing out that they too will lend to older people.

The record seems to be held by the Family Building Society (also known as National Counties) which will give a new mortgage to applicants who are up to the age of 89. The term of the loan is limited to the average life expectancy – so at that age it cannot run more than five years. But at 72 you could borrow money over 14 years and at 60 the term can be 24 years.

Find out what factors affect your mortgage application.

A joint mortgage will be based on the older person’s age. The mortgage is on the normal terms – it has to be affordable out of income, usually a pension, but there is no premium charged to older borrowers.

Smaller building societies can lend to older people because applications are dealt with individually, whereas banks use computers which often routinely refuse a loan if it will end beyond the age of 65.

So Saga Magazine readers who need a mortgage may be better trying smaller building societies – even if you are in your eighties!

Paul Lewis writes a regular column in Saga Magazine.

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.