Older borrowers with secure incomes are being refused the mortgages they want and can afford by the big six lenders, according to a mystery shopper survey conducted on behalf of the Family Building Society.
In addition, the big six lenders were reluctant to deal with enquiries by phone preferring to steer applicants to an online application.
Initially callers were told they had to fill in an Application In Principle (AIP) form online before they could make a telephone enquiry but in most cases the call handlers were persuaded by the mystery shoppers to go through the form with the would-be applicant.
The requests were for a 10-year term for a mortgage with a 5-year fixed rate, a 2-year fixed rate or discounted for the first 2-years.
However, all were rejected by the major lenders that were approached.
Most requests were rejected on the grounds of age or only considered on a reduced mortgage term so the borrowing would end prior to the lenders’ upper age limit, significantly increasing the monthly payments.
Alistair Nimmo, Family Building Society’s director of marketing, said: “It is extraordinary that in today’s financial climate and the introduction of Consumer Duty which rightly has a focus on good customer outcomes, the major lenders are still discriminating against older borrowers purely because of their age.
“Many of the smaller building societies, including the Family Building Society offer mortgages to those coming up to and in retirement, if they can afford the contractual monthly payments.
“In our experience these borrowers, many of whom have solid pension pots, are much more secure than those of working age, who could be made redundant with little warning.
“Indeed, we will lend a new mortgage to a 90-year-old, but only if it is affordable.”
