Mortgage customers over 65 find it significantly harder to get the mortgage they want than younger borrowers, according to the latest Mortgage Broker Tools (MBT) Affordability Index.
With the number of people in the UK aged 65 and over soon expected to surpass those who are 18 and below, the latest MBT Affordability Index shows that only 37% of potential borrowers in this age group are offered the loan size they request, compared to 75% of younger people.
The number of customers aged 65-plus who were offered a loan size smaller than they requested was 28%, compared to 24% for those under 65.
This is in spite of lower average loan requests from people aged 65 and over. In March this year, the average loan requested by older borrowers was £100,000, compared with an average of £216,750 for those below the age of 65.
The number of customers for whom no lenders are able to offer a mortgage of any size is also much higher for people aged 65 and over. For March 2022, the proportion of loan enquiries where no lender was able to lend was 35%, up from 26% in January. This figure reached a high of 68% in December 2020, compared with lows of 18% and 17% in January and February 2020.
However, the percentage of cases where no lender is able to lend drops to just 6% for over-55s and falls further again to 1% of enquiries from customers aged under 65, a figure that has remained largely steady since summer 2020.
Tanya Toumadj, CEO at Mortgage Broker Tools, said: “As a culture, we often focus quite heavily on younger borrowers and, in particular, first-time buyers. However, we need to have a well-functioning housing market at all stages.
“It is also worth noting that we have an ageing population, with the number of people aged 65 and over soon expected to outstrip those 18 and below in the UK. This is a growing demographic, and they do not fit into a simple box, with many opting to work steady jobs for longer, for example.
“While age can be a concern for what is fundamentally a long-term commitment, it is just not that simple.
“The mortgage market needs to focus on the individual, and in doing so provide a more certain landscape for borrowers who might present just as strong a lending option as many of their younger counterparts.
“This is where technology can help, with research platforms like MBT empowering brokers to carry out an in-depth search across many dozens of lenders to ensure they are sourcing the best affordability option for their clients.”
