Are you too old to get a mortgage?

In recent weeks the maximum age for borrowers looking for a mortgage has been in the news with 2 of the largest high street lenders both offering products aimed at older customers.
So what does this mean for borrowers and how does the age of the borrower impact on their ability to get a mortgage?
Historically, the maximum age was restricted by the fact that your mortgage term was set so that your loan was repaid before, or on, your state retirement age, 65 for a man and 60 for a woman. The lenders rationale behind this was simple, the lack of affordability of mortgage repayments once the borrowers were no longer in work and living on pensionable income.
There was also a cultural element in that retirement was very much seen as a time of enjoying the fruits of years of employment and so for many the thought of taking on considerable debt at that stage of their life was not a welcome one, hence no demand or pressure on the market to increase age limits.
Changing demographics over the last 20 years however have seen a gradual increase in maximum age limits as the population has lived and worked for longer and state pension ages have not necessarily meant the end of full time employment. Additionally, house price pressure has increased the average age of first time buyers considerably, creating a demand for longer loan terms in order for them to be able to afford the repayments and clear the debt.
As always, maximum age limits and attaching restrictions vary depending on the lender but typically you can obtain a mortgage up to age 70 or even 75 fairly easily.
In this latest move the Halifax and Nationwide have both announced increases to their maximum age limits over the past month. The Halifax were the first, with an increase in their maximum age limit at outset to 80 instead of 75 and a maximum age at maturity of the loan of 85.
The Nationwide has also increased its limit, from 75 to 85, from July onwards on its standard mortgage range subject to a maximum Loan to Value (LTV) of 60% and loan of £150,000.
These announcements are very much aimed at meeting the demand of older borrowers for lending well beyond the current age limits either to enable them to move home later in life or to release equity from their existing property.
It is likely that other lenders will follow suit over the months to come giving a wider range of options for borrowers.