Increased Longevity and Mortgage Term

S

Sophrosyne

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Do banks take increasing longevity into account in determining the term of a mortgage loan for first-time buyers?
 
RedOnion said:
There are only a few lenders left in the market. Maximum ages:
AIB is 68 is PAYE, 71 if self employed.
BOI is 70.
PTSB is 70.
Avant is 70.
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Interesting that age based discrimination is allowed in Ireland for mortgages.

I read a WSJ article this week which said that discrimination for a mortgage based on age is illegal in the US. But other criteria such as income can still obviously be taken into account, in US bank calculations, which would lead to many retired people not been eligible.
 
My enquiry was more about the mortgage term. I think the average used to be around 30 years for first-time buyers.

However, if they will have longer working lives, I wondered whether banks increased the term accordingly.

Of course, the longer the term the more interest would be payable, but once they secured the mortgage many of them would have the manoeuvrability to pay it down more quickly by making payments off the capital.
 
RedOnion said:
AIB is 68 is PAYE, 71 if self employed.
BOI is 70.
PTSB is 70.
Avant is 70.
Click to expand...
I'm surprised some lenders go to 70. A lot of contracts have compulsory retirement at 65 still and the statistics match up that employment falls off very rapidly after 65:

Employment rate of 60-64 year olds is 60%.

Employment rate of 65-74 year olds is 21%.

I guess lenders have crunched the numbers on this but at a personal level I think it's very important to be mortgage free on retirement.
 
NoRegretsCoyote said:
I'm surprised some lenders go to 70
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70 is a maximum, not default. I'm not close to underwriting detail anymore, but I know a few years ago some lenders required a letter from your employer confirming that there wasn't a mandatory retirement age if term went beyond normal retirement age.
 
Sophrosyne said:
My enquiry was more about the mortgage term. I think the average used to be around 30 years for first-time buyers.
Click to expand...
35 tends to be maximum currently. At stressed interest rates the difference between monthly repayments on 35 vs 40 years is smaller than you'd think.
 
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