From Monday 18th March, Halifax’s maximum working age will change across certain applications where specific criteria is met.
The lender will support the majority of customers with borrowing up to the age of 75; however, a maximum working age of 70 will apply to remortgage applications with any capital raising and additional borrowing, as well as some purchase and remortgage applications because of the level of credit score achieved.
These changes have been made as part of a regular review of Halifax’s lending criteria.
According to the lender, this change applies to applications starting from Monday 18 March.
If an application was started before this date, even if just a DIP was keyed, the previous policy will apply. This change does not apply to product transfer or further advance applications.
A spokesperson from Halifax said: “These changes have been made as part of a regular review of our lending criteria and will ensure we can continue to lend responsibly to a broad range of customers.
“We will continue to support the majority of customers with borrowing up to the age of 75.”
Reaction:
Darryl Dhoffer, adviser at The Mortgage Expert:
“This is outrageous. Halifax appears to be tightening the screws on the very borrowers who need them the most.
“Halifax is turning a blind eye to the struggles of average people.
“High mortgage rates and shorter terms are a recipe for disaster, pushing even more borrowers into debt and hardship.
“They only recently extended the term to 75, so to now reduce it back down to 70 seems a bit odd.
“And what’s this about “some” applications passing a mystery credit score test?
“What kind of mixed message is that? Halifax needs to promote clear and fair lending practices, not create confusion like this.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“This partial U-turn in policy from Halifax appears unfair and discriminatory.
“Halifax is basically going to force those with more moderate credit scores to have higher payments over shorter terms, putting their finances under greater stress.
“Very disappointing from the UKs largest mortgage lender.
“I do not see the relevance of someone’s credit score at application and their ability to work to 75 and service the mortgage payments in the distant future.”
Craig Fish, director at Lodestone Mortgages & Protection:
“What a slap in the face to those in need from the Halifax.
“When most lenders are adjusting their criteria to help more people, Halifax are adjusting theirs to help less, and more importantly to help less of those who need it the most.
“This is not what you would expect from such a large lender, who are already not in brokers’ good books due to their secretive rate setting policy when it comes to helping existing customers.
“This is going to tarnish the Halifax name even further. They are no longer the popular name on the high street they used to be.”
Rhys Schofield, brand director at Peak Mortgages and Protection:
“It’s easy to raise the torch and pitchfork at the Halifax here, but I can see where they’re coming from when you consider that they need to lend responsibly.
“Is it ethical to dish out mortgages like sweets well past when most people would want to retire?
“This may seem harsh now to borrowers in genuine need but allowing those sorts of applications and saddling people with more debt later into life could be more problematic in the long run.”
Rohit Kohli, director at The Mortgage Stop:
“In a week where the stats say mortgage arrears have shot up in the last 12 months, Halifax, instead of looking at ways to be more helpful and flexible to borrowers who are struggling and want to do the right thing to manage their debts, pull the rug from under them by slamming a maximum working age of 70 years on them.
“It’s disappointing to see this from a lender that says it’s about the people but doesn’t seem to want to help the very same people when they probably most need it.”
Riz Malik, director at R3 Mortgages:
“This seems a strange approach given that a large proportion of the UK population is likely to work longer and delay retirement.
“In addition, what relevance does it have if someone wants to borrow more money or have a lower score?
“Whilst lenders should be looking to be more flexible with their criteria, Halifax seems to be moving the other way. I hope others don’t follow like lemmings.”
Gary Bush, financial adviser at MortgageShop.com:
“A head-wobbling change to underwriting criteria from the UK’s largest mortgage lender, Halifax.
“Why offer less chance to fix a problem for applicants that obviously have a problem that they are trying to willingly address.
“Stretching borrowing out by a number of years could be the difference between making and breaking a family household budget.
“This is not a good look at all to limit these consumers to age 70 if it’s clear their employment will continue afterwards.”
Charles Breen, founder at Montgomery Financial:
“These rigid and obscure lending policies are not just relics of the past, but active roadblocks on the path to financial inclusion.
“They leave the most vulnerable stranded on the sidelines.
“This is just a prime example of the range of barriers which put off borrowers in financial difficulty and make their situations even worse.
“It’s genuinely shameful coming from one of the biggest lenders in the country shortly after a spike in arrears has been reported.”
Gareth Davies, director at South Coast Mortgage Services:
“This is a disastrous change of criteria in my view.
“Essentially cherry-picking the ‘better clients’ with enhanced criteria and sticking two-fingers up at anyone that could arguably be more in need.
“Halifax need to make their minds up when it comes to retirement criteria.
“This is effectively a U-turn on their recent relaxation of the rules, which was met with resounding support from the broker community at the time.”
Luke Thompson, director at PAB Wealth Management:
“Bizarre. That’s all there really is to say about this.
“Not too long-ago, Halifax launched a retirement age for all of age 75 to much fanfare.
“No concerns over anything, just ‘we will be happy to lend to 75 with just a form to be completed’.
“A few months later we have a major reversal on this. You have to wonder what the reasoning is.
“Have they been put under pressure by the FCA? Are they unhappy with the profile of customer they have been attracting since implementing this change?
“Whatever the reason it seems very strange to massively change your criteria just a few months after the previous update to loosen criteria.”
Robert Timm, managing director at Sunland Mortgages:
“This is a very disappointing update from Halifax, especially so soon after implementing this policy.”
Amit Patel, adviser at Trinity Finance:
“Lending into retirement will always be a sensitive subject. The days of people retiring at state pension age have long gone.
“The trend now is that people are working much longer not because they want to but out of necessity.
“For Halifax to restrict the maximum working age to 70 is harsh and I hope other high street lenders don’t follow suit.”
Elliott Culley, director at Switch Mortgage Finance:
“Halifax only recently changed their criteria to allow using employed income up to the age of 75, which brought them in line with many other mortgage lenders.
“The difficulty with this criteria change is it makes their criteria less black and white.
“I am unsure why a poor credit profile means you can’t work to age 75 and it would be a better idea to base it on the type of job instead.
“As a broker we won’t know if the credit profile is strong enough until a decision in principle is performed.
“This adds time to the advice process and can mean having to change our advice at a later stage, which can frustrate borrowers.”
