The Intermediary – August 2026 - Flipbook - Page 37
L AT E R L I F E L E N D I N G
Opinion
Next chapter
lending is key
for borrowers
T
he mortgage industry
has always been fond of
labels. They help define
markets, identify
customers and explain
propositions. Yet
sometimes those labels outlive their
usefulness.
For years, lending into retirement
has been treated as a niche proposition
designed for a relatively small group
of borrowers whose circumstances sit
outside the mainstream. That framing
may once have been accurate, but it no
longer reflects the reality.
Recent research from Experian
highlighted that more than half of
first-time buyers expect to be paying
their mortgage into retirement. If
the majority of people entering home
ownership today already anticipate
carrying mortgage debt into later life,
then lending into retirement is no
longer a later life issue. It is a home
ownership necessity.
The challenge facing first-time
buyers is well understood. People
are purchasing later than previous
generations. They are spending longer
in education, renting for longer,
saving larger deposits and oen
entering the housing market at a point
where house prices remain stretched
relative to earnings. Even where
affordability has improved, the reality
is that many borrowers need mortgage
terms of 35 or even 40 years to make
monthly repayments manageable.
The maths is straightforward.
A borrower purchasing their first
property at 35 on a 40-year term could
still have a mortgage at 75.
Yet much of the mortgage market
continues to operate according to
assumptions built for a different era.
Many lending policies were designed
when borrowers typically retired at
65, enjoyed the certainty of defined
SIMON CHAPMAN
is head of group marketing
at Vida Homeloans
benefit (DB) pension schemes and
expected to clear their mortgage well
before leaving the workforce.
Changing lives
Many people now continue working
beyond traditional retirement age,
whether through employment,
consultancy or self-employment.
Others move gradually into
retirement, combining earned income
with pension drawdown, investments
and other sources of wealth. Defined
contribution (DC) pensions have
replaced final salary schemes for
much of the workforce, creating
greater flexibility, but also requiring
lenders to think differently about
affordability and income assessment.
Against that backdrop, the idea that
a mortgage should simply stop at a
predetermined age looks increasingly
disconnected from reality. The
question should never be whether
a borrower has reached a particular
birthday, but whether they have a
sustainable means of repaying.
Whether it’s lending for first
homes, next homes or later life plans,
all need to be considered differently.
The changes introduced in our Next
Chapter lending proposition are not
about taking greater risks or lowering
standards. They are about aligning
lending criteria with the way people
actually live and work. Extending
the maximum age at the end of term,
properly incorporating pension
income into affordability assessments
and creating sensible pathways for
lending into retirement all recognise
that the customer journey does
not suddenly end at 65. This is not
just about borrowers approaching
retirement. It is equally relevant to
those entering the market today.
If more than half of first-time
buyers already expect their mortgage
to extend into retirement, then firsttime buyer today needs confidence
that the lender understands what their
income profile might look like in 20 or
40 years’ time.
Equally, brokers need criteria
that allow them to place cases with
confidence rather than being forced
into unnecessary compromises.
There is also a wider housing
market question here. Governments,
regulators and lenders spend
considerable time discussing
affordability, housing supply and the
barriers facing first-time buyers. But
there is lile value in helping more
people onto the housing ladder if the
mortgage market is unable to support
modern homeownership.
For many borrowers, spreading
repayments over a longer period is the
difference between owning a home
and remaining in the rental sector.
Lenders must be prepared to support
customers throughout the entirety of
those longer journeys.
That does not mean abandoning
responsible lending principles. It
means assessing customers properly,
understanding future income streams,
considering retirement planning and
making informed lending decisions
based on evidence rather than
assumptions.
Next Chapter Lending is not simply
about serving older borrowers. It is
about ensuring that home ownership
remains achievable, sustainable and
relevant for entire generations. If we
are serious about supporting home
ownership in the decades ahead, that
is exactly the kind of thinking the
market needs. ●
August 2026 | The Intermediary
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