13 March 2024, 16:36 | Updated: 13 March 2024, 16:41
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Halifax is imposing a new 70-year age limit on thousands of homebuyers which will lead to higher monthly payments for many.
Britain’s biggest mortgage lender is reducing the maximum age at which it will allow many borrowers to say they intend to retire from 75 to 70 – meaning that in many cases it will not lend to someone older than this limit.
Banks hope this will help them rein in risky lending.
The move will force thousands of borrowers to reduce the length of their terms in future, increasing their monthly mortgage payments as a result.
The changes are especially likely to affect people in their 40s and 50s who are seeking to maximise the length of their loan.
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Darryl Dhoffer, an adviser at The Mortgage Expert, said: “Halifax appears to be tightening the screws on the very borrowers who need them the most.”
The change comes after the bank increased the working-age limit to 75 last summer.
Speaking to the Newspage agency, Mr Dhoffer added: “High mortgage rates and shorter terms are a recipe for disaster, pushing even more borrowers into debt and hardship. They only recently extended the term to 75, so to now reduce it back down to 70 seems a bit odd.”
Halifax’s decision means in many cases, the bank will only accept that someone can work until the age of 70, reducing the maximum amount of time they can borrow money for by five years.
Many of the high street’s big lenders including Nationwide Nand NatWest, already have a maximum age of 75.
But others, including Barclays have a lower age of 70.
A spokesperson for Halifax Intermediaries 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.”
The change will take effect from Monday, March 18.