Older borrowers with secure incomes are being refused the mortgage they want by the six big lenders, according to research from the Family Building Society.
A mystery shopper survey requested mortgages for a 10-year term with a five-year rate, a two-year fixed rate or discounted for the first two years, however, all were rejected by major lenders.
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.
This was despite all the loan requests being acceptable to the Family Building Society.
Family Building Society director of marketing, Alistair Nimmo, 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.
“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.”
Nimmo added that, in Family BS’s 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,” he added.
In addition, the research reported that the big six lenders are reluctant to deal with enquiries by phone, preferring to steer applications to an online application.
Initially, callers were told they had to fill in an Application in Principle 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.
tom.dunstan@ft.com
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