Ageism in mortgage applications

A1jockey

I have recently encountered ageism in some of the large mortgage lenders whereby they are excluding applications from people of a certain age (usually around70/75) or similarly excluding on the basis of :"has to be paid back by" ages. This relates to a secured loan and there risk to the organisation is reduced as the house is the security. Lenders are basing decisions purely on age, and not ability to pay (eg Nationwide exclude at age 75) even though the pensioner in question may receive a  high secured annual income: in some ways they are more of a secured "risk" than people of working age in these uncertain times. I have questioned the FCA and the Prudential Authority, both have failed to respond. The Nationwide response was essentially, "thats our policy". That doesn't make it right and legal! Some lenders have no upper age limit, so the age factor cannot be enshrined in financial legislation.  This is discrimination based solely on age: that would be my definition of "ageist".

A1jockey

Apologies... spelling error... should be "their" risk and not "there". Oops.

[Deleted User]

It is both right and legal. Its based on risk.

Just as Saga won't take on customers under 50.

tiglon

You're right, it is discrimination based on age. It's also justifiable, reasonable and completely legal.

EverythingIWant

Corrr as if unbelievably cheap house prices and massive equity gains weren’t enough for the boomers!! 

haras_n0sirrah

The issue is that the lender doesn't want the bad press of having to evict 90 year olds from their homes for not making their mortgage payments

kingstreet

It's like everything else involved in mortgage lending. Some lenders do somethings, some lenders don't. There are options at age 75.

csgohan4

It depends, but if your only on state pension at 70, how are you going to afford the mortgage payments. It's about affordability. If you say you can afford, expect to show pension statements e.t.c. 

[Deleted User]

EverythingIWant said:

Corrr as if unbelievably cheap house prices and massive equity gains weren’t enough for the boomers!! 

😣😣😣
If they'd said that kind of thing to you you'd trot out the go-to phrase "don't judge" 🙄😣

A1jockey

Update: I have received a response from the Govt Minister responsible who states that if the practice and process is triggered by age, without a clear reference to ability to pay, it is both against the spirit of the legislation and may well deemed to be unlawful discrimination.  

MWT

A1jockey said:

Update: I have received a response from the Govt Minister responsible who states that if the practice and process is triggered by age, without a clear reference to ability to pay, it is both against the spirit of the legislation and may well deemed to be unlawful discrimination.  

It isn't going to be hard to show that the risk of significant additional health care costs affecting affordability is directly related to age ...

Similarly the risk of one partner dying and seriously impacting affordability increases directly in proportion to age and with the average life expectancy of a 75 year old male being in the region of 12 years they can reasonably show that their limitations are based on financial risk not prejudice.

Also remember that the aim of mortgage lending is to get the loan repaid through the normal regular payments of the borrower, not by forced sale of the security. So as the risk of that goes up, so do the costs of the borrowing.