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Too old to get a mortgage and too young to afford a house?

by on November 26, 2014

Back in 2013 I blogged in surprise that during a mortgage application I had discovered that I was officially an older worker and commented that I was unsure how anyone of any age could offer assurances as to their level of income in twenty years time.

The BBC and other have today picked up a similar story with the headline that the “Over 40s being ‘frozen out’ of home loans” and this of course at a time when in the UK the average age of buying your first house is also increasing.  This of course confounds the notion of an ‘older’ borrower for a mortgage – as there aren’t that many ‘younger’ borrowers in any case!  It sounds like probably the venn diagram of those who can afford to buy and are eligible to get a mortgage has an increasingly small intersection.

Sky reports that the introduction of new mortgage checks “meant that customers aged over 40 who were seeking a standard 25-year mortgage were finding their options restricted because they will be borrowing beyond a normal retirement age of 65”.

This prompts a number of questions, not least that if you are, say, 40 today, is it realistic to assume a “normal retirement age of 65”, given there is no longer mandatory retirement and the state pension age is moving steadily upward.

And to return to the question posed in my original post – how accurate is anyone’s prediction of their earnings in twenty years anyway?  I bet my 20-year old daughter could no more give an accurate estimate than her 48 year old mother can.

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