Leeds Building Society has become the latest lender to raise the age at which mortgage borrowers can finish paying off their mortgage, providing a boost to buyers who are increasingly getting on to the ladder later in life.
The limit has been raised to 80 instead of 75, the lender has announced.
Richard Fearon, chief commercial officer for Leeds Building Society, said: “Life expectancy is increasing and our change to the maximum age on mortgage applications acknowledges this fact.
“The age of retirement also is less rigid than it was and many people reaching this point in their life may continue to work full or part time and are stepping back from their careers in a more gradual way.”
Mortgage lenders have traditionally been nervous about providing home loans that will overlap into retirement. But that has made life more difficult for buyers as they get on the ladder later.
The average age of a first-time buyer is 30 in the UK and 32 in London, according to Halifax, so many could face being turned away if a lender doesn’t trust that they can pay the mortgage into their sixties or seventies.
That has become an old fashioned approach in recent times as many people work longer, there is no longer a default retirement age, and in some cases many have a pension that pays a reliable income.
Trade body the Building Societies Association recognised this at the end of last year and announced a review into retirement ages among members.
The move by Leeds follows Nationwide building society increasing its upper limit to 85 in July for existing customers with retirement income.
Halifax and Scottish Widows have put up their thresholds to 80 in recent months.
Of the other big lenders, RBS, Natwest and Barclays will lend up to age 70 and Santander and HSBC will go to 75.