Published On: Wed, Mar 13th, 2024

Mortgage warning as Halifax announces major change for home-buying loans | Personal Finance | Finance

Britain’s biggest mortgage lender is to reduce the maximum working age it considers for some home loans from 75 to 70.

The move by Halifax flies in the face of evidence that more people are delaying retirement and working well into their seventies and even beyond, according to news agency Newspage.

It also represents a U-turn by the lender, which increased the working age used to assess granting a home loan from 70 to 75 only last summer.

Many home buyers are looking to extend the terms of their mortgages towards 40 years in order to make monthly payments more affordable.

A number of lenders will even allow people to make an application on the basis that they will continue working to the age of 80.

However, Halifax has announced that from Monday, “the maximum working age will change on certain applications where specific criteria is met”.

From that date a maximum working age of 70 will apply to:

* Remortgage applications with any capital raising/additional borrowing.

* Some purchase and remortgage applications based on the customer’s credit score and profile.

A spokesperson for 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. For all other applications we will continue to use a maximum working age of 75.”

Many brokers slammed the decision, however others said it was right for Halifax to take steps to ensure it was lending responsibly.

Speaking to the Newspage news agency, Darryl Dhoffer, Adviser at The Mortgage Expert, said: “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.

“They only recently extended the term to 75, so to now reduce it back down to 70 seems a bit odd.”

Managing Director at Yellow Brick Mortgages Stephen Perkins, said: “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 UK’s largest mortgage lender.”

Craig Fish, Director at Lodestone Mortgages & Protection, said: “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.”

Riz Malik, Director at R3 Mortgages, said the decision was ‘strange’ given the fact more people plan to work into old age.

“I hope others don’t follow like lemmings,” he said.

However, Rhys Schofield, Brand Director at Peak Mortgages and Protection, said he understood the decision.

“It’s easy to raise the torch and pitchfork at Halifax here, but I can see where they’re coming from when you consider that they need to lend responsibly,” he said.

“Is it ethical to dish out mortgages like sweets well past when most people would want to retire?”

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