Halifax will lower the maximum working age for “certain applications where specific criteria are met” to 70.
In a note to mortgage advisers, Halifax confirmed that the change to the working age criteria would come into force from 18 March.
The lender said that it would “continue to support the majority of customers” with borrowing up to the age of 75.
However, for remortgage applications with any capital raising or additional borrowing and some purchase and remortgage applications, dependent on credit score and profile, a maximum working age of 70 will apply.
The lender said that changes were made as “part of a regular review of our lending criteria and will ensure we can continue to lend responsibly to a broad range of customers”.
The firm said that, for all other applications, a maximum working age of 75 would be used.
In summer last year, Halifax raised the maximum working age it uses for earned income from 70 to 75.
Reining back
Adrian Lowery, financial analyst at wealth manager Evelyn Partners, said of the change: “Having raised the limit to 75 only last summer, the lender is apparently reining back on lending that is now perceived as risky.
“For many older borrowers, and particularly those approaching a loan application, this might feel like the goalposts are being shifted back to where they were before mortgage rates started ballooning.
“Some of those who were banking on obtaining or retaining a Halifax loan that allows them to repay past 70 years of age might have to go to back to the broker.”
He explained that borrowers are usually asked when they intend to retire and most lenders have an upper age limit beyond which they are reluctant to lend. Even to take a mortgage term past the state pension age, the lender will often ask for the borrower to explain their future repayment strategy.
Lowery continued: “Nevertheless, tightening up what was for eight months or so a more relaxed approach that afforded borrowers some flexibility to keep monthly repayments down at a time of sky-rocketing mortgage rates, will catch many borrowers off guard.
“While many such borrowers will be confident that they can either shorten the loan at a later date, or continue repayments beyond 70 – either because they will keep working or have a good pension in place, or both – the Halifax would probably argue that they need to have responsible criteria in place.”
