Later life borrowers often have complex income and don’t credit score the same way as younger borrowers do. That’s where lenders like us, who manually underwrite and use common sense, can help.
Clients who are approaching or already in retirement are often turned down by high street lenders who rely on credit scores. Later life borrowers don’t score the same way as younger ones do – pensions usually aren’t treated as a salary, and many older clients have paid off loans or credit cards. But at Family Building Society, we say yes to complex income. We don’t credit score, we offer tailored credit checks looking at the client’s whole picture. Our manual underwriting approach allows us to treat clients as individuals and use common sense to make decisions.
Income into retirement
We recognise that a later life borrower is one of the best risks to lend to because they’re usually incredibly stable. We’ll consider a wide range of earned and passive income and assess affordability using not just traditional state or fixed pensions, but also modern pension pots like drawdown, SIPP and SSAS. Uniquely, your clients do not need to be actively drawing from these pots to qualify, helping them to avoid unnecessary tax liabilities.
For example, with a £500,000 drawdown pension pot and a 10-year term, we can use up to 90% of the value, counting £45,000 per year as income. For shorter terms, well use 80% of the pot, divided by as few as five years—yielding £80,000 per year in this example.
The same flexible approach applies to other investments (like ISAs and bonds). This is far more generous than the industry norm, which typically uses only 3–5% of the pension or investment value and requires the funds to be drawn.
We’ll consider earned income up to age 75 and can carry out two affordability calculations: using employed income first and then switching to pension income to extend the mortgage term.
We’ll also use rental income and stocks and shares ISAs for affordability, plus remuneration drawn by limited company directors (where the applicant is not actively running the day-to-day business operation).
Generous terms up to age 95
We offer standard mortgage products in retirement with higher maximum ages than many other lenders; up to age 95 at end of term for owner occupier repayment mortgages, and up to age 89 when the loan commences for owner occupier interest-only and buy to let mortgages.
This is helpful for many reasons. It opens up the door to borrowers who previously thought they were simply too ‘old’ for a standard mortgage and were looking at less suitable options like equity release or a RIO. Being able to extend the mortgage term well into retirement also makes mortgages much more affordable by lowering monthly repayments. And because we look at each clients’ situation on an individual level, we can ensure it’s the right solution for them and that they’re achieving a good outcome.
Helping family
Many older borrowers want to be able to help their family and are increasingly looking at the equity in their home to do this.
Recently we assisted an older client who wanted to help her daughter onto the property ladder. With the mother’s strong income and solid pension heading into retirement, we were able to offer them a Joint Borrower Sole Proprietor mortgage. This increased the daughter’s affordability by taking her mother’s income into account, and as the mother wouldn’t own the property, she was not liable to stamp duty on a second home. We were able to stretch the term over 30 years, up to age 95 for the mother, making the monthly payments manageable.
With more and more younger people finding it hard to buy their first home, or step up to their second home, we’re seeing increasing numbers of clients who want to use the equity in their home to give as a gift or loan to their children – either as a deposit or to help them with legal and moving fees. It’s a large part of the market that we’re able to help with due to the fact we can lend to higher ages – allowing for longer mortgage terms than other lenders.
And family help is not just in one direction towards younger members. A couple in their early 70s came to us after their current lender refused to extend their mortgage due to their age. They didn’t want to downsize just yet and were attached to their family home where they hosted a revolving door of grandchildren who lived close by. We were able to offer them a reverse JBSP mortgage where they could factor in their daughters’ incomes alongside their own retirement income. This provided them with the financial boost needed to secure a mortgage and stay in their home for longer.
Speak to your BDM
With our Education Hub and knowledgeable team of BDMs, education is at the heart of our approach to later life lending. The team is always ready to explain in detail the nuances of more niche areas.
Our BDMs are not only knowledgeable, they’re award winning! We were delighted to win ‘Best BDM Team’ at the Moneyfacts Awards in 2025, reflecting the commitment, expertise and day-to-day support that our BDMs bring to every broker relationship.
It’s a bit of a cliché, but speaking to your BDM is worth its weight in gold. Our team cover the whole of the UK and are there for you throughout the process – from the beginning to help you work out exactly what we can do for your client, how we’ll calculate affordability, liaising with our underwriting team, and all the way to receiving a call from you to say your client has their keys and is delighted!
We offer open-minded lending into retirement. Give us a call and see how we can say yes to your client.
To contact our Mortgage Desk or your local BDM,
CALL US ON: 01372 744155
OR EMAIL: [email protected]
| FAMILY BUILDING SOCIETY, EBBISHAM HOUSE, 30 CHURCH ST, EPSOM, SURREY KT17 4NL Family Building Society is a trading name of National Counties Building Society which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. National Counties is on the Financial Services Register Firm Reference Number 206080. |
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