In April, data showed there was at least one lender able to provide the loan requested by 70 per cent of self-employed borrowers compared to 64 per cent for those aged over 55.
Nine per cent of borrowers aged 55 and over were unable to get a mortgage of any size, while this was the case for two per cent of the self-employed.
Overall, self-employed borrowers and those aged 55 and over were having a harder time securing their requested mortgage loans in April. Across the market, lenders were able to fulfil the needs of 75 per cent of borrowers.
Loan size gap
The difference between loan sizes available to customers aged 55 and over was larger than the spread available to the whole of the market and to the self-employed.
The largest loan available on average to a customer aged 55 or over was £287,540 while the smallest loan was £147,372 – a spread of £140,168.
Meanwhile, the largest loan available to a self-employed customer was £231,206 and the smallest loan of £110,552, representing a difference of £120,654.
For the whole of market, the largest loan available on average was £245,890 and the smallest loan was £145,742, a disparity of just £100,148.
Different factors at play
Tanya Toumadj, CEO at Mortgage Broker Tools, said: “The latest MBT Affordability Index shines a light on the challenge that mortgage customers aged 55 and over face in securing the loan size they want.
“There are a lot of different factors at play here. Obviously maximum age at the end of the mortgage term, and anticipated retirement age play a significant role in how much customers will be able to borrow and lenders often have different criteria in these areas, but there are also other considerations.”
“As customers grow older, in general, they also become wealthier and many will have additional sources of income to consider from investments and pensions.
There’s a huge variation in the way that lenders underwrite these additional income sources and it means that the choice of lender can make a very significant difference to how much a customer aged 55 or over is able to borrow,” she added.
Toumadj said: “We have spoken before about the importance of whole of market research and it’s even more apparent for this group of customers.
“Every broker in the country will have a number of clients who are aged 55 or over and, if they are not using technology to research all of the affordability options, they are not giving their clients the strongest chance of achieving the loan they deserve.”