Mortgage - Age Discrimination?

LizzyR

Leeds Building Society offer a 10 year fixed rate mortgage at 3.99% and have an upper age limit for loans to be repaid of age 75. BUT, if you are already in receipt of a state retirement pension, they will only consider a mortgage application under their 'lending into retirement' criteria, all interest rates for which exceed 3.99%! So at 63, and with 12 years to age 75, I cannot get a 10 year fix, only a 2 year fix at 4.49% or 2 year offset at 4.19%, or variable rate at 5.69%! Without prejudice, is this age discrimination?

ACG

If your lending money beyond normal retirement age you still have to be able to prove how you can afford it post retirement.

If you were 45 years old you couldnt do a mortgage for 30 years if you were unable to evidence how you can afford the mortgage post retirement. Everyone is treated in the same way.

So if you have said your going to retire at 67 but your pension will not be enough for the next 8 years (from 67 to 75) then your not going to pass their affordability assessment.

LizzyR

Thanks AGC. I satisfy all the lending and affordability criteria evidentially, until death!

Thrugelmir

LizzyR wrote: »

Without prejudice, is this age discrimination?

Increasing onus is being placed on lenders to ensure that borrowers have the ability to repay thir debts. To avoid a repeat of the (yet unresolved) issues of the recent past. So caution is the word I would use.

maninthestreet

Age discrimination is illegal in the workplace, but not when providing products or services to the general public.

dunstonh

If age discrimination in retail was not allowed then SAGA would not exist.

jamesd

LizzyR, it's perhaps best to try getting press coverage of "lenders charging pensioners more".

ACG

Theyre not charging more, they have a 10 year fixed rate - its such a long fix that not everyone is going to be eligible for it.

Its not like theyre saying the 10 year fix is 2.99% but 3.99% if your over a certain age.

jamesd

If there are products that are not available to pensioners that are cheaper, the effect is simple: to charge pensioners more.

They are saying that the 10 year fix is not available just because of the pension, not because the prospective borrower is less than ten years from the end of the term. It's unclear whether it's over a certain age - state pension age for the person - or because it's actually in payment.

LizzyR, do you need the state pension income? What happens if you defer the state pensions, which you can do once even after starting to take them? Does that suddenly make you eligible because you're no longer receiving the state pensions?

LizzyR

My thoughts exactly jamesd! If indeed that did suddenly make me eligible, now wouldn't that be something? You are correct in saying that the 10 year fix is not available once they are 'aware' that pensions are received. I do not need the state pension income to satisfy the affordability criteria and will consider your helpful suggestion. Many thanks for your insightful response.

LizzyR

Quick update. My quest for the non age discriminatory mortgage continues! Indeed my quest for a mortgage to age 80 continues. Lloyds go to 75, with a super flexible part repayment part interest only possbility, to ease the potentially high repayment burden, provided an investtment repayment vehicle is in place to underpin the interest only portion. Interestingly, a cash ISA investment is unacceptable, but a stocks and shares ISA is! Strange safe v risky investment logic to me. Now researching converting cash ISA to s&s ISA .