Britain’s biggest mortgage lender is making an ‘outrageous’ change to its rules for borrowers
ONE of Britain’s biggest lenders has changed its mortgage criteria, which could mean:
Halifax is lowering the maximum working age for mortgage applicants from 75 to 70.
There is a maximum working age of 70 for:
- Remortgage applications for any capital increase/additional loans
- Some purchase and remortgage applications due to the credit score level achieved and overall credit profile.
The move could force thousands of borrowers to shorten the length of their current mortgage term, dramatically increasing their monthly payments.
Most lenders only allow borrowers to take out a mortgage as long as they plan to work.
Halifax’s decision to lower the applicable working age will now reduce the amount of time someone can borrow by five years.
It marks a major turnaround for Britain’s biggest lender, which only raised the maximum working age for mortgages to 75 in August last year.
Darryl Dhoffer, consultant at The Mortgage Expert, told news agency Newspage: ‘This is outrageous. Halifax appears to be turning on the borrowers who need them most.
“Halifax turns a blind eye to the struggles of the average person.
“High mortgage rates and shorter terms are a recipe for disaster, pushing even more borrowers into debt and hardship.
“They only recently extended it to 75, so it seems a bit strange to bring it back to 70 now.
Many of the major high street lenders, including Nationwide and NatWest, already have a maximum age limit of 75.
But others, including Barclays, have a lower age of 70.
A spokesperson for Halifax Intermediaries said: “These changes have been made as part of a regular review of our lending criteria and will ensure we can continue to lend responsibly to a wide range of customers.
“For all other applications we continue to apply a maximum working age of 75.”
The change will take effect from Monday, March 18.
How to get the best deal on your mortgage
If you’re looking for a traditional mortgage type, getting the best rates depends entirely on what’s available at any given time.
There are several ways to get the best deal.
Typically, the larger the down payment, the lower the interest rate you can get.
If you take out a new mortgage and your Loan-to-Value ratio (LTV) has changed, you will have access to better rates than before.
Your LTV decreases if your outstanding mortgage is lower and/or the value of your home is higher.
A change in your credit score or a better salary can also help you access better rates.
And if you’re nearing the end of a standing deal soon, it’s worth looking for new deals now.
You can sometimes lock in current deals up to six months before your current deal expires.
If you leave a fixed deal early, you’ll typically be charged an exit fee, so you’ll want to avoid these additional fees.
But depending on the cost and how much you can save by switching or staying, it may be worth leaving the deal, but compare the costs first.
Use one to find the best deal Mortgage comparison tool to see what’s available.
You can also contact a mortgage broker who can compare a much wider range of offers for you.
Some charge an additional fee, but there are plenty who provide free advice and are paid only on the lender’s commission.
You will also need to consider mortgage costs, although some may not have any costs at all.
You can add the costs (sometimes more than € 1,000) to the costs of the mortgage, but keep in mind that you will pay interest on it and will therefore cost more in the long term.
You can use a mortgage calculator to see how much you can borrow.
Please note that you will also need to meet the lender’s strict criteria, including affordability checks and viewing your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three months’ pay slips, passports and bank statements.
What mortgage assistance is available?
As soon as you think you might have a problem with your monthly mortgage payment (whether you can’t pay anything, can’t make all your monthly payments, or can’t pay it on time), contact your lender immediately.
They have certain arrangements in place to help you if you are having a hard time.
Under the government’s Mortgage Regulations, you can temporarily request to convert your mortgage to an interest-only mortgage, or extend your term to reduce monthly payments.
You do not need to submit further income information or share monthly spending obligations; you can simply ask your lender to make the switch.
And it won’t affect your credit score for six months if you choose to take the offer.
If someone taking advantage of the temporary measures decides to return to their original plan within six months, they are free to do so.
Ask your lender about the breathing space arrangement if you feel that payments are unaffordable.
Under the breather program, no debts will accrue interest and no fees will be added for 60 days.
You are protected against collection agencies and bailiffs.
You may also be able to request a payment holiday; then you don’t have to pay anything.
However, interest and fees may still accrue, and missed payments will need to be made in the future.
Each company has different policies, so you will need to contact us to find out what support is available to you.
Mortgage Interest Support or SMI helps people on Universal Credit (and other benefits) by giving them a low interest loan.
The assistance goes toward mortgage payments or loans taken out to help repair any damage to the home.
SMI is a loan that you must repay with interest when you sell your home.
You will receive help with paying the interest on a maximum of € 200,000 of your loan or mortgage.
But you only get a maximum of £100,000 if you get pension credit.
Many local municipalities have welfare assistance programs to help struggling families.
The assistance available varies, but you can get free cash, food stamps, and help with bills like rent and utilities.
Check with your municipality whether you are eligible and what you can claim.
And of course it is always worth checking whether you are entitled to all available benefits.
Entitlement is free calculator calculates whether you are eligible for various benefits, tax credits and Universal Credit.
Debt charity StepChange also has a benefits checker that is free to use and does not record your results.