In a move that reflects a decision recently made by Nationwide, Halifax said it would consider earned income to calculate the mortgage income where there is a clear intention to work beyond state pension age.
If the mortgage term extends past 70 or the client’s anticipated retirement age if sooner, the lender will continue to use verifiable anticipated retirement income in the affordability assessment.
David Hollingworth, associate director of communications at London and Country, welcomed the move explaining that many people now expected to work beyond the confines of the state retirement age.
“This brings them into line with the approach that many have already adopted,” he said.
“What it fails to do is to apply a more radical rethink on how flexible criteria needs to be when it comes to helping older borrowers. Those with a stable income that prove longer term affordability continue to be disappointed by the widespread caps on maximum age.
“The introduction of the new Hodge deal suggests that the range of options for older borrowers could continue to expand. However, it looks set to remain something of a niche until we see some movement from the major lenders.”
Earlier this month, equity release provider Hodge Lifetime launched a residential deal aimed at buyers over the age of 55. The mortgage is currently being distributed through Legal and General’s Key Account firms.
