The Intermediary – July 2025 - Flipbook - Page 21
L AT E R L I F E L E N D I N G
In focus
Lending over 60
and beyond
A
lthough we have just
celebrated our 11th
anniversary as Family
Building Society,
we’ve been around
a lot longer – since
1896 in fact! Our mission has always
remained the same: we lend to all
members of the family, regardless of
age or situation.
We had a record year in 2024, and
our continued success is very much
dependent on the relationships we’ve
built with brokers and intermediaries
across the country.
There is no longer a taboo on having
a mortgage in retirement. Being
mortgage-free used to be a champagne
moment in one’s life, but with the
growing need for intergenerational
lending and increased use of property
equity for Inheritance Tax and
retirement planning, meeting the
rising demand for borrowing into
retirement requires an innovative
approach and increasingly
flexible criteria.
Later life is one of our main lending
areas at Family Building Society.
Many of the clients that come to us
are in their mid-to-late sixties or early
seventies, having reached the end of
their mortgage term with their high
street lender who will not extend it
into retirement.
We know this, not just because of
the enquires we see, but from our
own research into how the high street
lenders view the older borrower – in a
word, badly!
Oen their income has reduced,
possibly due to retirement,
bereavement or a ‘grey divorce’. There
are also older borrowers who are
unencumbered but looking to gi
money to family members, invest in
a second home, or carry out home
improvements on their current
property. High street lenders see these
cases as just too much trouble!
Lending to borrowers in later life
with complicated income streams isn’t
always straightforward. However,
manual underwriters are able to
look at each application on a case-bycase basis.
DARREN DEACON
is head of intermediary sales
at Family Building Society
Innovative criteria
With more flexible criteria and a
broader product range available
to older borrowers, traditional
mortgages can be a more aractive
option than equity release. UK
Finance data confirms this.
Brokers not familiar with our
approach are oen very pleasantly
surprised when we tell them about
our flexible and innovative lending
criteria. In fact, one of the most
common things we hear is, “Wow! I
didn’t know you did that!”
The way we treat investments and
pension pots is perhaps the most
surprising. We can consider up to 90%
of the value in a pension pot divided
by the full term of the mortgage, and
use that as an affordability measure.
This is the case whether the pension is
in drawdown or not. It’s a great way of
monetising an asset.
Another timely and innovative
product is Joint Borrower Sole
Proprietor (JBSP). We’re seeing an
increasing trend of older borrowers
wanting, or needing, to help family
members financially.
As we know, with tougher
affordability, high interest rates and
increasing property prices, geing
onto the property ladder is harder
than ever for younger borrowers.
Our own JBSP products allow
up to four incomes to be used for
affordability – one or two borrowers
who will own and occupy the
property, supported by up to two other
family members.
A great benefit of this is that
supporting family members will not
be liable for Stamp Duty on a second
home. Last year, we broadened the
family members eligible to support
a JBSP to grandparents, aunt, uncles
and siblings.
Meeting the rising
demand for borrowing
into retirement requires
an innovative approach
We also offer JBSP in reverse –
enabling adult children to help their
parents to meet affordability if they
no longer have the income to support
their repayments in cases of divorce
or bereavement – allowing parents
to stay in a much-loved family home
for longer.
Lending trends
Recent UK Finance data showed a
resilient and strengthening market
for later life lending, with consistent
quarterly increases throughout 2024.
Lending to the over-55s in Q1 2025 rose
to £6.1bn, up 42.6% compared to the
same quarter a year previously.
Demand is there, but education
remains key. Brokers and clients alike
are oen not aware that standard
repayment and interest-only
mortgages are available to those in or
approaching retirement.
These can oen be more costeffective than equity release and an
alternative to retirement interest-only
(RIO) mortgages where death-stress
rates prove prohibitive.
We continue to work with other
lenders, mortgage clubs, networks
and trade bodies to ensure brokers are
aware of the options available in the
later life sector. ●
July 2025 | The Intermediary
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