Jeremy Wood is chief executive of Dudley Building Society
We were one of the first to scrap upper age limits across our whole product range – a decision that in our opinion was the right thing to do – and have returned impressive levels of good quality business from very credit worthy borrowers.
What we did come to realise quite quickly was that planned retirement ages are moving further into the future. A first-time buyer in their 40’s (now quite a frequent occurrence) would have been historically forced to take a mortgage over 20 – 25 year term to ensure their mortgage was repaid before a hypothetical retirement age – one we now know to be unrealistic. We are acutely aware that in the modern age many of us are working longer, demand more flexibility in our lifestyles and have more complex financial situations than ever.
Let’s be realistic, an ambitious 20 something has the potential to increase his or her earnings over their career, have a family and move house to suit changes in circumstances a number of times. Longer mortgage terms can sometimes offer additional freedom to match lifestyle choices or borrowers can reinvest in their property to add to its market value.
Quality advice is essential in such situations due to the increase in the total amount repayable – borrowers need to enter these agreements fully understanding their options and the consequences of their choices. We realised that simply scrapping upper ages did not quite go far enough so made the changes to our mortgage term to enable our partners to offer greater flexibility and choice to their clients.