Mortgage term to 85th birthday
Where your client is in receipt of private or company pension we will consider applications up to the 85th birthday of the oldest borrower, subject to a maximum 75% loan to value. State pension will also be considered but only as a secondary income source.
Where the case is in joint names the clients must demonstrate the loan is affordable upon the death of either borrower. This can be established either by a transfer of pension rights or a specific life policy to clear the mortgage balance.
Independent legal advice must be taken by the non-borrower in all cases where the mortgage is to be in a single name and the property is occupied jointly.
Mr & Mrs A were both retired and in receipt of both private and state pension.
In the past 12 months they had divided their time between the UK and a second property abroad that was mortgage free. Their broker contacted us as they were now looking to relocate back to the UK permanently and wanted to purchase a new property.
A £110,000 mortgage was agreed at 56% loan to value and underwritten against their pension income. As the eldest borrower, the mortgage term was taken up to Mrs A’s 85th birthday. As part of our manual underwriting process we were able to establish that Mr A had adequate life assurance to repay the balance should he pass away before the end of the mortgage term, this was necessary as Mrs A’s pension was not sufficient to support the mortgage on her own.