Do older borrowers deserve better?

Published on 9 October 2017

A report showing that older people deserve a better deal from banks and building societies has highlighted how vital The Cumberland's willingness to lend to this generation is.

The Financial Conduct Authority (FCA) is calling for banks and building societies to ditch the rigid rules some of them have which prevent many older people from getting mortgages.

The Cumberland Building Society, however, is proud to have led the way in providing services to the elderly and has no upper age limit on its mortgages.

Seventy-year-old Peter Capstick (pictured) is one of many pensioners who knows all too well about the frustrations of dealing with high street banks and came to the Cumberland after being turned down twice for a mortgage on his Lancaster home.

As Peter is coping with a few health issues he wanted to have the flexibility of being able to use his savings if he needed them rather than use them to pay off his mortgage.

But he was baffled to be told by his two lenders that they wouldn’t provide him with a new mortgage because of his age.

“I had been with another building society for a long, long time and probably transferred my mortgage about three or four times as I moved to different houses. Previously they had suggested that they would extend my mortgage beyond the age it was due to expire to when I was 70 or 75,” Mr Capstick said.

“But obviously attitudes hardened as when I tried to get them to extend the mortgage with about six months to expire they said: ‘No, we know how much savings you have, you can afford to pay it off’.

“I pointed out to them that as I am disabled and have a few health problems I wanted the flexibility of having savings in the bank as you never know what expenses you might have to deal - I’d already had to convert my bathroom into a shower room. But when I asked about a mortgage they were just not interested,” he added.

Here's how we can help you arrange a mortgage in later life.

It had been the same at Mr Capstick’s high street bank where staff had been happy to discuss investments, insurance and other services, but made it clear that a mortgage was out of the question.

A second bank gave Mr Capstick a mortgage, but after two years he was on a higher interest rate and wanted to save money by switching to a cheaper mortgage as many customers do.

“They said because of my age and because they don’t really like interest only mortgages I would have to pay the higher mortgage rate until it expired. They thought it would be better if I paid it off with my savings and weren’t particularly helpful,” Mr Capstick said.

It was then that he turned to the Cumberland after seeing advertising to older borrowers. “I went in and they fixed me up more or less straight away,” he said.

“At the bank it seemed to be a case of this is what the screen says and this is what I must do, but at the Cumberland it was the screen says this, this and this, but I will get in touch with the underwriting team to say what I think what we should do in this case,” he added.

“It seems some lenders find it simpler to say no then send an email and make a special case.”

Mr Capstick has another reason to thank the Cumberland. Previously he had been given a pile of forms to fill in, but had difficulty doing so due a neurological condition which makes writing very difficult. “At the Cumberland it was all done on screen and mostly face to face in the branch which was a big help,” he said.

Phillip Ward, brand manager at the Cumberland, said: “A lot of banks and building societies still have an upper age limit for borrowers and, even with sufficient equity and ample income, older borrowers can struggle to find a mortgage lender who will help. At the Cumberland, our mortgage range is available to everyone, irrespective of age.

“Our decisions to lend are based on affordability and a person’s circumstances, not age, and we’re proud to be helping people around our region, both early and later in retirement, borrow the money they need to help them achieve their goals.”