Lending in/into Retirement

Information for intermediaries 

Lending in/into Retirement

The Society undertakes lending to two categories of borrower where the end of the mortgage will be after retirement. One of these is the Society’s Retirement Interest-Only Mortgage and the other is defined as lending in/into retirement.

The Society will need comfort by way of appropriate information and assurances that the level of retirement income will be sufficient to continue to meet the ongoing monthly mortgage payments. For lending purposes the Society considers age 70 as normal retirement age. These mortgages effectively operate in the same way as a standard residential mortgage, as they have a specified term by the end of which it is expected all borrowing will be repaid.

Lending in/into Retirement

The Society undertakes lending to two categories of borrower where the end of the mortgage will be after retirement. One of these is the Society’s Retirement Interest-Only Mortgage and the other is defined as lending in/into retirement.

The Society will need comfort by way of appropriate information and assurances that the level of retirement income will be sufficient to continue to meet the ongoing monthly mortgage payments. For lending purposes the Society considers age 70 as normal retirement age. These mortgages effectively operate in the same way as a standard residential mortgage, as they have a specified term by the end of which it is expected all borrowing will be repaid.

Lending in/into Retirement

The Society undertakes lending to two categories of borrower where the end of the mortgage will be after retirement. One of these is the Society’s Retirement Interest-Only Mortgage and the other is defined as lending in/into retirement.

The Society will need comfort by way of appropriate information and assurances that the level of retirement income will be sufficient to continue to meet the ongoing monthly mortgage payments. For lending purposes the Society considers age 70 as normal retirement age. These mortgages effectively operate in the same way as a standard residential mortgage, as they have a specified term by the end of which it is expected all borrowing will be repaid.

The Society will consider mortgage applications where the term extends beyond the borrower’s expected retirement age, normally up to maximum age 85, where the borrower can clearly demonstrate a sustainable income stream to ensure the mortgage continues to be affordable throughout the term of the mortgage, including following any change in circumstances during the term, such as retirement.

The Society will take a prudent and proportionate approach to assessing the applicant’s income beyond retirement date.

The closer the customer is to retiring, the more robust the evidence of the level of income in retirement should be.

For guarantor cases, where the personal guarantor is making a contribution towards the mortgage payments and will be in retirement, an appropriate affordability assessment will be conducted, in line with the above.

 

Maximum Age

 

The following table states the borrower’s maximum age where the Society would normally expect the borrowing to be repaid:

Product

Normal Maximum Age

Owner-Occupier

85

Retirement Interest-Only

No Maximum

 

FOR INTERMEDIARY USE ONLY