This week’s top comment came from John Azopardi, who reacted to the story: Mortgage prisoners talking directly with lenders to find solutions.
He said: “There must be a way of saying if customers have a satisfactory record of payment for so many months, maybe 12 or 18, then they can afford a mortgage irrespective of their income – particularly if they are paying a rip-off rate.
“This mortgage prisoner situation is a complete injustice. Shame on the lenders who are taking advantage of these circumstances – and shame on the regulators who have failed to come up with a sensible work-around.
More factors driving age up
Kirstie Caneparo also had something to say this week, as she responded to the article: Underwriting must become more flexible to deal with older borrowers – Cleary.
She said: “I agree there is a need for more later life lending, willingness and underwriting capability to look at what older customers can afford based on a realistic projection of how their earned income and retirement/savings income will interact over time.
“The additional driver you didn’t mention for more later life lending is people joining the housing ladder later in life and potentially with a smaller percentage deposit.”
She added: “These factors result in the average age of customers at maturity of mortgages increasing.”
Free right to extend
Lastly, Trevor Barnett replied to the article: Brokers must emphasise overpayments as longer terms become the new normal – analysis.
He said: “In my experience, it is the lenders forcing the longer terms for ‘affordability reasons’ because of having to take into account future interest rate rises.
“The client can often afford the higher payment now and should be paying it. With overpayments, it is only ever an option and in most cases they spend their money elsewhere.”
He continued: “Clients should be motivated to have the shorter term now and if – and when – interest rates do go up, there should be a right to extend the mortgage term then, for no admin fee.”