Age limit for HTB mortgage

70Jenny2184

Hello, this time last year while looking at standard 95% LTV mortgages I was told by a mortgage advisor I could have a mortgage term taking me to age 68.  I later looked at HTB and went as far as a reservation, no issues with the mortgage but I was told by the HelpToBuy Agent my deposit needed to be greater than the 5% advertised due to their affordability checks - the additional amount took the deposit to approx. 8%.  I used the same mortgage advisor for the HTB application and the same mortgage term taking me to age 68.  In the end I cancelled my reservation due to Covid-19 and also rethinking the area.

I want to apply for HTB again next year but avoid paying over the 5% deposit.  I also want to be able to purchase at the limit of the North West cap of £224k to give me the most choice but this is £10k more than the house I reserved last year.  Without any other significant changes in my circumstances, I'm wondering if an option is to have a mortgage beyond 68 if they're available to meet the HTB Agent's affordability for 5% deposits.  If anyone has knowledge if any HTB mortgages are indeed available past 68 I'd be very grateful to hear.

I'm also considering as a temporary measure reducing my pension contributions from 8% to 5%, unfortunately this would see my employer contributions reduce from 10% to 5% too.  There is not much cash gain for me in doing this after tax and NI, I'm reluctant but it does improve my affordability for HTB when I check the spreadsheet from their website.

70Jenny2184

I should add that I have no intention of paying a mortgage until 68 or beyond; I would hope to overpay and clear it off much earlier but my immediate issue is the affordability checks to get the house in the first place.

MovingForwards

Do not reduce your pension payments, your future you won't thank you. Also lenders mostly base lending on you annual income, not take-home pay.

@kingstreet is the resident broker who specialises in H2B properties, maybe he can say whether the age can be extended into retirement.

70Jenny2184

Thanks @MovingForwards
I'm not keen on the pension idea to be honest but it would be temporary, its not for the mortgage affordability which was fine at 4.5x salary but for the HTB loan element which had much stricter eligibility checks.

haras_n0sirrah

Htb will let you go to 75. A lot of lenders have a cap of 70 without needing pension projections so another 2 years at least should be doable 

getmore4less

H2B was limited to 25year term, think that got changed to 35years this year.

what term took you to 68?

kingstreet

There are two lenders who easily cope with a selected retirement age of 75 and a term until then. One requires evidence of pension contributions on payslips, one doesn't. The HTB affordability calculator will also allow a finishing age of 75.

70Jenny2184

getmore4less said:

H2B was limited to 25year term, think that got changed to 35years this year.

what term took you to 68?

It's hard to explain without the HTB spreadsheet but on there you input all your data and it basically gives you a yes or no answer for the loan.  So with my salary, current pension contributions, 32 year term to age 68, it came back as a no unless I increased my deposit by £3k.

I want to do what I can now to minimise the extra deposit required really, even if short-term it's not beneficial.  Its sad I guess but lots of people are in this position just struggling to get their foot on the ladder.  Once I get the house it's all very affordable for me so I'll be able to put pension contributions back and overpay on the mortgage.

70Jenny2184

kingstreet said:

There are two lenders who easily cope with a selected retirement age of 75 and a term until then. One requires evidence of pension contributions on payslips, one doesn't. The HTB affordability calculator will also allow a finishing age of 75.

Thank you for this. I actually gave NatWest a call since they approved me last time and they said max age is 70 so that does help a bit. I would hope I don't need the age 75 option but its good to know they exist.