Flexible solutions for later life lending
We lend in retirement with higher maximum ages than most and aim to help borrowers who have been turned down by high street banks simply because of their age. With our generous mortgage terms (up to 95 at end of term for Owner Occupier repayment and 89 when the loan commences for Interest-Only and Buy to Let), we’re often able to offer a longer mortgage term which makes monthly payments more affordable.
We actively help the older borrower by taking into account earned income up to the age of 75 and other sources of income beyond that such as fixed pensions, pension pots, investment and rental income. By looking at income on a case-by-case basis, we’re able to consider complicated applications, such as using net profit evidenced on an SA302 or up to 90% of the value of a SIPP (if the mortgage term is 10 years or more).
Joint Borrower Sole Proprietor
We also offer flexible solutions for families with our Joint Borrower Sole Proprietor mortgage, and in 2023 we widened the criteria so that other family members could support the mortgage. Previously we had allowed older parents to support their children and vice versa, but we’ve now extended this to include grandparents, aunts, uncles, and siblings. We use the same age criteria for this arrangement, so that older family members up to age 95 can support their children or grandchildren.
Alternatively, we also offer this arrangement in reverse, so that adult children can help their parents with affordability, allowing them to stay in the family home for longer. This allows adult children to support their parents to buy or remortgage a property, so that the parents can stay in their family home for longer. Rates can be found that are as competitive as standard mortgages.
Supporting our brokers
To strengthen our personal approach to lending, in 2023 we increased our sales team coverage by 30%, adding Business Development Managers to Central London, the Southwest and Wales and a new telephone BDM covering various other postcodes. We now have BDM coverage across the whole of England and Wales, plus some areas of Scotland. Brokers can discuss cases in detail directly with a BDM to help place those complicated scenarios. Our BDMs have strong relationships with our underwriting team so they can discuss a case with them before application to maximise the chance of it going through successfully and also ensure the broker is utilising the client’s income and in the best way possible to achieve their desired outcome.
Furthermore, we were one of the first lenders to increase the procuration fee for Product Transfers, to mirror what we pay for new business for both Owner Occupier & BTL business. Following the introduction of Consumer Duty and the increase in demand for product switches, brokers have had a noticeable increase in workload – and combined with market conditions resulting in a slowdown for new purchase business, this support becomes even more vital.
Despite these difficult market conditions in 2023, we exceeded our lending target by 20%. Overall, completions were up 8% year-on-year, and for later life (those in or going into retirement), completions for Owner Occupier mortgages were up 32% year-on-year.
We’re proud of the level of practical and financial support we provide to our brokers, and feel education is really important. We hear from so many brokers that just didn’t know some of the possible options available to clients, especially in the later life lending space. Affordability for older borrowers can prove to be complicated so it’s important that a broker fully understands a client’s circumstances and knows how their income can best be used.
Therefore, in 2023 we increased the amount of educational support for the broker community through the delivery of a wide range of round table discussions with leading industry figures and trade organisations, webinars, video debates, CPD articles, podcasts, written articles and interviews. Additionally, we enhanced our affordability calculator – allowing it to be used for Joint Borrower Sole Proprietor arrangements in the same way as standard application, removing the maximum loan size, and improving the way it calculates affordability for houses with more than two adults. Lastly, we automated our mortgage illustration process, meaning brokers can request a multi-product illustration, and will now get a response within an hour – 24 hours a day, 7 days a week.
