Ipswich Building Society today unveiled a new programme providing mortgage solutions to retired borrowers and people whose mortgage term would end after retirement.
The society will make all of its residential mortgage offers available to pensioners looking to borrow as well as to clients aged up to 85 years at the time their mortgage term ends.
The new launch is based on Ipswich research from February that found 18 per cent of people in the UK expect to be still paying off their mortgage when they retire.
The new programme will also provide options for the so-called “mortgage misfits”, who borrowers turned out to be “unfit” to take down a mortgage under the new Mortgage Market Review (MMR) that came into force last April. The new MMR rules often stop lenders of providing options for older borrowers who would be aged over 65 when the term of their mortgage ends. This has resulted in borrowers in their mid-forties and above having a reduced choice of mortgage providers and products. Furthermore it limits the life choices of these individuals, for example limiting their ability to release the equity in their property to help family members onto the property ladder or to help address long term health needs.
Commenting on the new programme, Paul Winter, chief executive of Ipswich, said: “Our research has shown the availability of mortgage products is an issue of concern to all age groups, not just those approaching retirement. Sadly many of the high street lenders have decided to interpret the recent mortgage regulation as a reason to restrict borrowing to older and retired borrowers, adopting a ‘computer says no’ approach to applicants. I don’t believe MMR was ever meant to be used in this way.
Ipswich Building Society is committed to supporting borrowers of all ages as well as those it identifies as mortgage misfits, while retaining a diligent approach to lending. Examples of mortgage misfits include the self-employed, self-builders, first-time buyers, older generations and those who have experienced a lifestyle change. Our manual underwriting means we are able to take into account other forms of income, including pensions and investments, more readily.”
Key features of lending under the Retirement Mortgage Programme:
• The Society’s usual lending criteria will apply
• Applicants can access our standard range of mortgage products and up to 75% LTV
• Employed applicants will be required to submit last 6 months payslips
• Self-employed applicants need to have been self-employed for at least the last 2 years prior to application
• Applicants must have good credit history and not be in adverse credit
• We will only offer a mortgage if it is in the best interests of the applicant
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