Borrowers aged 50 and over will be subject to a four-and-a-half times income multiple up to their retirement age, an increase from three-and-a-half times earnings.

As part of the criteria changes to its later life mortgage range, the lender will no longer require an additional assessment when the applicant reaches the age of 80.

If the mortgage is considered to be affordable based on a four-and-a-half times pension income ratio at the time of retirement, and it extends beyond the age of 80, the applicant will remain eligible for the society’s lending in retirement products.

 

Rapidly evolving

For applicants already aged 80 or over, the building society will continue to consider applications with a maximum income multiple of three-and-a-half times earnings for both single and joint applicants.

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Ashley Pearson (pictured), head of intermediaries at Loughborough Building Society, said: “The later life lending sector is rapidly evolving as the lifestyles and financial needs of those aged 50 and over change, at pace.

“This positive criteria change will enable our intermediary partners to provide a more personalised and accommodating lending experience for later life borrowers, and we anticipate this adjustment will be well-received across the market.”

 

Rush to be mortgage-free

A report from Key published this month revealed that 57% of over-55s were making sacrifices in the run-up to retirement so they did not have to make mortgage repayments once they had retired.

Borrowers were most likely to limit general spending or spending on leisure and entertainment, with almost a third saying they had cut back in these categories.

One in five said they were only going to be mortgage-free by the time they retire by pushing their retirement age back, while 14% said they were lowering pension savings to help clear their mortgage.