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Boulger: Age restrictions could lead to poor product advice

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Ray Boulger has warned that some advisers could be recommending the wrong mortgage product to older borrower because they are limited by lenders' age restrictions.
Boulger: Age restrictions could lead to poor product advice

Most lenders set a rule where the mortgage has to be repaid by a certain age, or before the borrower retires, whichever comes first. Those who need to borrow beyond this age have limited options so it’s important their adviser is aware which lenders are age friendly before discussing a more expensive equity release option.

Boulger said the affected advisers would be those tied to one lender or a panel of lenders.

“A large majority of lenders refuse to lend beyond the age of 70 or 75, and sometimes an even younger age, fortunately there are a few more enlightened mainstream lenders,” he said.

“The problem is that lender-based advisers or a not whole-of-market broker may not be aware when there is a mainstream option for older clients, which would make simply referring such clients to an equity release specialist dangerous.”

Lenders’ age restrictions have become a hot topic of late as the age of the average first-time buyer creeps up. BBC Watchdog covered the issue this week, accusing lenders of rejecting people because they were too old.

The House of Lords debated the subject last month with Tory party member Baroness Gardner of Parkes leading the charge calling on the government to urge lenders to abolish the restrictions.

Of the big players, Lloyds, Nationwide, HSBC and Coventry Building Society have a maximum age at the end of the term of 75, while Santander, Barclays and RBS set the limit at 70.

Several lenders including Bath, Yorkshire and National Counties Building Societies don’t state a maximum age but base lending decisions on personal circumstances.

“On buy-to-let The Mortgage Works will accept an application up to the age of 70 at application. With a max term of 35 years that could in theory take it to 105,” said David Hollingworth of London & Country. “Clearly BTL is a slightly different kettle of fish but many still limit to 75.”

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