Over 50s' mortgages spark concern
Published on 19 December 2011 12:30 PM
The financial services regulator has expressed concern about mortgage commitments among the over 50s.
The Financial Services Authority (FSA) urged mortgage lenders to take a more 'robust' approach to applications from those nearing retirement.
The regulator's call was sparked by the findings of its Mortgage Market Review.
The report found that 53% of borrowers aged over 50 had mortgages stretching beyond the age of 65.
Furthermore, nearly two-thirds (65%) were planning on borrowing into their retirement, according to the review.
The report found that many over 50s planned to move into smaller properties.
But it warned that rather than clearing their mortgages, they planned to increase their borrowing to support their quality of life in retirement and help young relatives secure mortgages.
'Poor lending decisions' were highlighted by the Citizens Advice Bureau. It cited as an example a recently-retired man who was granted a 20-year mortgage for £135,000 some 18 months earlier. The lender knew his age and that he was approaching retirement.
The man fell into arrears and the lender applied to the court for possession, according to the research.
Copyright Press Association 2011