The Intermediary – March 2026 - Flipbook - Page 66
L AT E R L I F E L E N D I N G
Opinion
Rethinking deals
for older borrowers
F
or decades, the aim for
most borrowers has been
to repay their mortgage
before retirement. But
with people living longer,
healthier lives and the
line between work and retirement
becoming blurrier, that principle is
starting to look outdated.
As a result, demand for later life
advice is increasing. Yet, for many
advisers, these conversations still
centre around equity release or
retirement interest-only (RIO).
However, the lending landscape
has evolved significantly in recent
years, and a growing number of
lenders are now willing to lend well
into retirement.
Despite this shi, many advisers
remain unaware of how far
criteria have moved, meaning a
standard residential mortgage
can be overlooked too early in the
advice journey.
Part of the challenge lies in legacy
thinking. For many years, maximum
age limits were rigid. Lending beyond
age 70 or 75 was oen difficult,
meaning those borrowers wanting
to refinance into older age had
few options.
While criteria have become more
flexible, perceptions have not always
kept pace. That can mean advisers risk
ruling out mainstream solutions that
may be more suitable.
High street lenders still tend
to operate more conservatively,
reinforcing the belief that mainstream
borrowing simply isn’t available
later in life.
At the same time, equity release –
and more recently RIO – became wellestablished and marketed clearly as a
solution for older clients. As a result,
they are oen front of mind when a
later life case presents itself.
This is not to diminish their value.
In the right circumstances, both
equity release and RIO can deliver
excellent outcomes. The key question,
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The Intermediary | March 2026
however, is whether they are always
the most suitable starting point.
There are many scenarios
where a standard capital-andinterest mortgage could be entirely
appropriate for an older borrower.
Many clients in their 60s and
70s continue to generate reliable
income from employment, pensions,
investments or rental properties.
Generally speaking, where that
income is sustainable and evidenced,
smaller lenders – particularly building
societies – are more prepared to take a
pragmatic view of age and retirement
income, offering terms that extend
well beyond traditional expectations.
For example, Bath Building Society
allows borrowers to be up to 85 at the
end of their mortgage term, while
others, such as Cambridge Building
Society, have no upper age limit.
A mainstream mortgage may also
be suitable where a borrower has a
maturing interest-only loan, but
still has sufficient income to support
ongoing repayments, even if they
cannot redeem the capital in full at
term. In these situations, refinancing
onto a new term can help them chip
away at that existing debt.
Clients who want to release equity
to gi to family members, or those
funding home improvements or
consolidating unsecured loans, may
also find it much cheaper over the
long-run to opt for a mainstream
mortgage over one where the
interest rolls-up.
The difference in total cost over 10 or
15 years can be significant, particularly
where borrowers have both the
income and the desire to maintain or
rebuild equity in their property.
There is also the regulatory aspect.
Under Consumer Duty, advisers are
expected to deliver good outcomes and
avoid foreseeable harm.
That includes ensuring clients
understand the long-term cost
implications of their borrowing
decisions, particularly where interest
ROB MCCOY
is senior product and business
manager at TMA Club
High street lenders
still tend to operate more
conservatively, reinforcing
the belief that mainstream
borrowing simply isn’t
available later in life”
roll-up could materially reduce estate
value over time.
If a standard mortgage could meet
a client’s objectives, it should be
considered alongside more specialist
later life options. This means
beginning with the client’s objectives,
income profile and long-term
plans, rather than basing product
assumptions on their age.
It also means looking beyond the
major high street lenders. Many
regional and mutual institutions
have quietly expanded their upper age
limits and demonstrate flexibility in
assessing retirement income.
Mortgage clubs such as TMA, and
criteria sourcing systems, can help you
uncover these options that you may
not have considered before.
As demographic trends continue
and more borrowers reach retirement
with outstanding mortgage debt,
demand for later life advice will grow.
Advisers who are confident
across the full spectrum of later life
lending, and who do not view later
life lending as a niche or specialist
silo, will be beer positioned to
grow their businesses and deepen
client relationships. ●
