More lenders commit to older borrowers & high LTV rates gap closes

Following the recent announcement that many high street lenders, such as Nationwide and Halifax, had decided to increase their maximum lending age limits, Family and National Counties Building Society re-affirmed their own commitment to this sector quite considerably.

While many have only recently started to ease their lending restrictions for borrowers past state retirement age, National Counties is offering brand new mortgages to customers as old as 89 – and has done since 2010.

With a long-running record of mortgage offers based on individual needs and circumstances, rather than criteria alone, the lender shows no sign of easing these offers anytime soon.

The lender will continue to support borrowers throughout retirement and right up until their 90s, compared to the many rejections on the high street.

This follows reports that the lending environment for non-standard borrowers is improving post-MMR, as an army of self-employed, retired borrowers and those with complex financial affairs are establishing more ground in the market.

In line with this, the gap between mortgage rates for borrowers with 10% deposits and 35% deposits is the closest it’s been in 5 years, as 90% loan to value (LTV) mortgages have dropped to their lowest average rate over the period.

Less than 1% difference now remains between the average 2 year fixed rate mortgage at 90% LTV, which has now fallen to 3%, and 2 year fixes at 65% LTV with an average rate of 2.03%. The difference in rates has reduced by 0.93% to 1.03% in just 2 years, with the lowest 2 year fixed rate at 90% LTV now standing at 1.99%.

This is excellent news for borrowers with smaller deposits, providing the opportunity to secure a rate previously reserved for those with more equity in their homes. The difference is even more visible for borrowers with larger loan sizes, with the difference in monthly repayments between the average higher and lower LTV mortgages on a 250,000 loan having now fallen from 388 in 2011 to 137 in 2016.

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