As part of the launch, Vida has updated its lending into retirement criteria to provide clarity for brokers placing cases where mortgage terms extend beyond retirement age.
The lender said this reflected the changing trends of homeownership in the UK, with many people buying their first home later in life and taking mortgage commitments into retirement.
Vida now defines lending into retirement as any mortgage where the term extends beyond a borrower’s expected retirement age or their 76th birthday, whichever comes first. The lender said this would give brokers reassurance when assessing affordability for clients.
For borrowers within 10 years of retirement, affordability is assessed using the lower of current earned income or projected retirement income.
For borrowers with more than 10 years until retirement, their current income may be used where active pension contributions are being made.
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In instances where most of the mortgage term falls within retirement, affordability is based on the lower current or projected income figure.
Vida’s criteria states that the mortgage term must end before a borrower reaches age 86.
Ross Williams, head of mortgage product management, said the journeys to homeownership were becoming “increasingly diverse” as borrowers’ needs evolved beyond traditional life stages.
He added: “Our enhanced Next Chapter Lending proposition builds on the flexible criteria we already offer, including solutions such as joint borrower sole proprietor, to help more people access and sustain homeownership. By providing greater clarity around lending into retirement and recognising a range of income sources, including pension income, we’re giving brokers more confidence when supporting customers whose mortgage needs extend beyond their working lives.
“Whether it’s a first-time buyer purchasing later in life, a family using additional income to support a loved one onto the property ladder, or a borrower planning confidently for retirement, our aim is the same: to give brokers the tools, certainty and flexibility they need to help more customers find a place to call home.”
