Age and mortgage term

Gina2000

Morning!

Does anyone know if the banks take into consideration the oldest or the youngest applicant's age to calculate the max mortgage term?

We're considering a property in the upper range of our budget so we'd like to take up the longest mortgage term possible to minimize the monthly payments (with the plan to overpay each year). I'm 33 and my partner is 43. I'm wondering what's the longest term most banks would offer us a mortgage for? We definitely would like to go over 25 years. Is 35 years realistic in our circumstances since that would take my partner over the 70 years retirement age? Since I would be under 70 when the mortgage is paid off in the worst case scenario, I'm hoping that the banks would consider 35 years on these basis.

Also, would our savings make any difference?

I spoke to a broker who was a bit vague and I was told that few banks would go to 75, which would give us around 31 years but I'm wondering if anyone has gone over that and which banks would consider a longer term?

Thank you!

Whats_your_forte

Morning. Always the oldest.

Hardest thing on this however is knowing the split on the income. If you are the highest earner, then a longer term up to age 75 can be considered as long as you have pension provisions ie personal or work pension. If the income is swayed in your partners favour, then you have to give consideration as to whether it is feasible for them to keep 'going' to age 75

If the plan is to overpay, then why do so from the start as this would help reduce your liability to overall interest.

There are lenders that will go beyond 75 but it all has to be plausible. A case could be where the main earner is self employed and the business in effect runs itself with little day to day involvement.

I personally would be very wary about saddling a debt up to the age of say 80 as you may want the mortgage today, but as soon as you move in, you want rid!

Good luck

[Deleted User]

There are a small handful of lenders that take employed income to 80 years old.

Given your ages there is a prime high street lender that will go to 80 with few questions asked. Had one go to offer at 79 years max age and it didn't even get touched by an underwriter. Single payslip uploaded and job done.
There are a few others but they get a bit more complicated as they are smaller lenders and that always brings more questions. I've had another offered that was for an admin assistant with a different lender and that was fine, but it was mainly as the younger applicant was earning significantly more.

Does your broker have access to whole of market? And how many lenders are there? Its surprising that the term whole of market doesn't mean that much as no single broker can arrange mortgages for every lender.
Maybe the broker you have seen just doesn't have access to the lenders that go above 75 so isnt aware of them. 2nd opinion needed perhaps?

Gina2000

Thank you so much! Deleted_User - any chance you could share the name of this lender? Is it halifax by any chance? My partner is currently retraining and took a step back in his career so I'm the higher earner at the moment, which I hope will help. I've used one of the online brokers (habito) and sounds like they've got access to the majority of lenders but it's not super clear what rates exactly we're looking at if we were to go over 30 years. We haven't found the property yet but want to establish what our upper budget will be based on what we're comfortable paying each month towards the mortgage (even though most lenders seem to be happy to lend us much more than that :cool:).

Whats_your_forte

Accord mortgages on the basis you have a payslip showing pensions contributions along with proposals if your retirement income isn't enough.

However to age 80 isn't something I'd recommend as ideally a saving of say £110pm on a £350k mortgage shouldn't be a deal breaker. I'd re think other factors as 37 year mortgages will be interest upon interest etc

Thrugelmir

Gina2000 wrote: »

Also, would our savings make any difference?

Why would you want to extend beyond a 25 year term if you have savings? Minimising outgoings by extending the term may well prove to be a false economy. Arguably better to tackle the debt while you are both at peak earning levels and interest rates remain low.

Gina2000

Tackling the debt early is the plan but we don't want to put all of our life savings into the deposit or mortgage at the moment. My OH is pretty risk averse and he needs to have a decent amount of money easily accessible. We're planning on overpaying and putting more savings into our equity when remortgaging later on and hopefully have it all repaid within 20-25 years in the end, maybe even quicker. The reason we want to start with a lower monthly commitment is if something beyond our control was to happen, we don't have to worry and the mortgage payments won't be eating too much into our savings. But I do get your point especially about the low interest rates atm and we will be reevaluating our options.

Retired_Mortgage_Adviser

Along with your plans to overpay, it makes complete sense. Reducing the term and overpaying have the same impact.

I used to recommend the same to some of my high-income clients who were hell bent on reducing their term to the minimum possible. Who knows what the future holds. There is no one stopping you from overpaying 10% of your balance annually (or more at remo) if you want to and can do so.

Gina2000 wrote: »

The reason we want to start with a lower monthly commitment is if something beyond our control was to happen, we don't have to worry and the mortgage payments won't be eating too much into our savings.

You mention Habito, did you get to the recommendation stage where they send out an email with a document attached with the recommended product?

If not, I would suggest you do that. When they ask "what stage are you at?", just select "I've had an offer accepted" and input details of a property similar to what you would likely buy. That will get you through to an actual mortgage adviser whom you can tell about your minimum desired term and ask them to find a suitable mortgage.

For the avoidance of doubt, I am not recommending Habito, you could use Trussle, Mojo or L&C or any another broker where there's no commitment to proceed with them. I prefer Habito as everything can be done 100% on chat and instantly (though they typically take a day to send across a formal recommendation).

To be honest, since I'm retired and don't have access to sourcing software anymore, even I use Habito advice under a pseudonym once in a while to see there are any options better than what I think!

Their VCs are happy funding an unprofitable service, might as well make use of their generosity

Gina2000

Retired_Mortgage_Adviser wrote: »

Along with your plans to overpay, it makes complete sense. Reducing the term and overpaying have the same impact.

I used to recommend the same to some of my high-income clients who were hell bent on reducing their term to the minimum possible. Who knows what the future holds. There is no one stopping you from overpaying 10% of your balance annually (or more at remo) if you want to and can do so.



You mention Habito, did you get to the recommendation stage where they send out an email with a document attached with the recommended product?

If not, I would suggest you do that. When they ask "what stage are you at?", just select "I've had an offer accepted" and input details of a property similar to what you would likely buy. That will get you through to an actual mortgage adviser whom you can tell about your minimum desired term and ask them to find a suitable mortgage.

For the avoidance of doubt, I am not recommending Habito, you could use Trussle, Mojo or L&C or any another broker where there's no commitment to proceed with them. I prefer Habito as everything can be done 100% on chat and instantly (though they typically take a day to send across a formal recommendation).

To be honest, since I'm retired and don't have access to sourcing software anymore, even I use Habito advice under a pseudonym once in a while to see there are any options better than what I think!

Their VCs are happy funding an unprofitable service, might as well make use of their generosity

Thank you so much, glad the idea of the longest term is not completely bonkers :rotfl:

Re habito, yes I've got a dedicated adviser who sent me some quotes and an AIP. I'm seeing the same rates when using their comparison tool but I will probably use them to go over the paperwork when ready to apply. And yes, their chat function is pretty good and they come back to you really quickly. :beer:

Thrugelmir

Gina2000 wrote: »

My OH is pretty risk averse and he needs to have a decent amount of money easily accessible.

Asked rhetorically. Will your pension provisions be sufficient to fund both your lifestyle and pay the mortgage if neccessary.

Likewise are you employed in secure roles. Losing ones career job in later life can more often or not result in less earning power.

There's a lot to be considered. That only you can answer. As very much down to your own personal circumstances. The discipline of knowing what your outgoing is every month to clear the mortgage. Sets the tone for how you manage your personal finances.