"By making these key changes, we hope to make lending in later life more accessible to more people."
- Donna Barclay, head of credit at Marsden Building Society
Marsden Building Society has made changes to its affordability model that could allow mortgage customers aged 55 to 85 to borrow more.
This latest announcement follows a number of updates to the Society’s later life and retirement interest-only (RIO) mortgage criteria, which aims to make later life lending more accessible.
As part of the recent changes, borrowers could benefit from five times income multiples on pound-for-pound remortgage cases on later life and RIO products, subject to affordability criteria. This covers the outstanding principal loan balance only and associated fees are excluded.
The maximum age limit for later life mortgages is now set at 90 at the end of the mortgage term and earned income is accepted up until the age of 75. Additionally, minimum equity requirements for downsizing are subject to the underwriter’s discretion at the point of application.
Case study
Richard, aged 62, sought to raise £50,000 on his unencumbered property to help his daughter get onto the property ladder. His property is worth £500,000 and he works part-time at a school earning £9,000 per annum, plus his private pension pays £24,000 per annum.
The nature of Richard’s work, his plans to work beyond state pension age and 100% of his private pension provided a total income of £33,000, so the case fit Marsden’s income multiples. Additionally, as Richard’s outgoings were minimal and the reason for capital raising was acceptable, the Marsden were able to offer a later life mortgage on a 13-year term paying interest only.
Donna Barclay, head of credit at Marsden Building Society, commented: “We’re committed to supporting borrowers in later life who are seeking mortgage solutions for a variety of reasons, including helping family members achieve their homeownership goals. As part of our commitment to later life lending, we’re regularly reviewing our criteria to meet the evolving needs of our members. By making these key changes, we hope to make lending in later life more accessible to more people.”
