Ageism in mortgages

Wingco44

Last week there was a landmark case against the Co-op where a 59 yr old was refused an extension to his mortgage on ageism grounds.
Whilst this case was bizarre due to his high income plus 3 private pensions (he was a retired Nationwide Advisor of some sort), I am facing a similar situation with a major building society/bank:
I'm approaching the end of contract of an Interest Only (IO) mortgage. I cannot clear the outstanding balance as the plan was to pay it off from a substantial inheritance which has not been realised yet although it is possibly only a matter of time. I am paying double the required £705 IO monthly payment at £1400 pcm.
When I asked for a 2-year extension, the local office advised they could not handle my request "due to my age" (69). I was put on to a special cases section by phone and later by letter they advised that I would have to sell my assets (2 Buy to Let apartments) and then they would apply an affordability check.
I have sold one BTL but it is unlikely to complete before the end of my mortgage contract in August 2016. (the buyer is saving more to meet the 10% deposit requirement)
My fear is that the BTLs provide an income of £1900 pcm (4 weeks void in 10 years) and that if I were to sell both, my affordability reduces hugely!! I have 2 State pensions (wife's and mine) and a private pension of £24,000 pa. But I can afford to repay double the minimum mortgage payment from pensions. And it is only until the inheritance comes in.
The mortgage balance is £165,000 and the property value is £330,000. The equity in the BTLs is £25,000 on the one that is STC, and only £10,000 on the other.
I don't think it is fair for the bank to insist I sell profit making assets just because of my age. I have agreed to reduce the balance with the proceeds of the first apartment sale and making other over-payments when funds allow. The bank is well aware of all of this but they still insist I sell my apartments.
The impression is that I am being refused an extension due to my age - I believe this is now superseded by last week's judgement.
I fully appreciate that I owe the money - it's the extension terms that I object to as these will seriously affect my retirement income.
Any advice welcome.

Thrugelmir

Wingco44 wrote: »

I have sold one BTL but it is unlikely to complete before the end of my mortgage contract in August 2016. (the buyer is saving more to meet the 10% deposit requirement)

Sounds like a fudge rather than a sale.

Unsure what your gripe is. You entered into a contractual arrangement to repay the mortgage. You've had plenty of time to sell the properties and use the equity to repay at least part of the debt. As and when interest rates rise you'll be left high and dry in terms of affordability. That's the real reason behind lenders being more restrictive. Borrowers are living in a dream world of low interest rates.

mrginge

the ageism argument is a red herring.
The issue is you agreed to pay back the loan in full at the end of the term, have assets that can do so, but instead expect the lender to wait until someone dies at some random point in the future before they get paid.

What happens if the old codger clings on for another five years?

davidmcn

Wingco44 wrote: »

the plan was to pay it off from a substantial inheritance which has not been realised yet although it is possibly only a matter of time.

You might want to clarify this, otherwise we'll presume you mean that granny is unexpectedly still alive...

lovehackney

Surely the issue here is that you have no repayment vehicle in place to pay off the balance, not your age.

If someone said to you "please lend me £165k and I'll pay you back in 2 years because hopefully someone will have died and I'll have an inheritance then", would you lend them the money? !!

Keep_pedalling

Never rely on an inheritance to pay anything off. Apart from the person living to 105, there is the risk that they actually leave everything to the cats home, leaving you high and dry.

Dave_Ham

I think you are attacking this from the angle, hence some of the comments received.

Rather than try to beat up your existing lender with the ageism card, why not focus your efforts on finding a lender that will lend based upon your current terms.

This could be on a residential basis or raising on the buy to lets, but almost certainly worth you getting formal advice.

Good luck

ACG

I had an email this morning from a lender who goes to age 110 on btl mortgages.

I think Dave is right, speak to a broker about your options, there could be a few different ways to find a positive outcome.

MortgageMamma

I concur, there may be something that can be done that would give you breathing space for a while, on the face of it your affordability seems ok, you can't force your existing lenders hand so think about moving to another lender who will be more flexible. You will need a very experienced adviser!