Vida has rebranded its later-life offering as Next Chapter Lending, with updated criteria for older first-time buyers, movers and borrowers with loans into retirement.
The changes are intended to give brokers clearer advice on affordability assessments where a mortgage term extends beyond a customer’s expected retirement age or their 76th birthday, whichever comes first.
Under the updated approach, borrowers will be assessed within ten years of retirement based on their current employment income or their expected retirement income, whichever is lower.
Those who have more than ten years until retirement can be assessed on their current income when making active pension contributions.
Where more than half of the mortgage term falls during retirement, affordability will be based on the lesser of current or expected retirement income, while all mortgage terms must end before the borrower reaches age 86.
Vida says the move reflects changing patterns in homeownership.
The proposal is aimed at three customer groups: later starters, customers over 50 who are looking for a long-term home and borrowers who are taking out a new mortgage after retirement to finance home improvements, support family members or help manage their own living costs.
Vida head of mortgage product management Ross Williams says “Homeownership is becoming increasingly diverse and borrowers’ needs are evolving well beyond traditional life stages.
“Our enhanced Next Chapter Lending proposal builds on the flexible criteria we already offer, including solutions like Joint Borrower Sole Proprietor, to help more people access and maintain homeownership.
“By providing greater clarity around lending into retirement and recognizing a range of income sources, including pension income, we are giving brokers greater confidence in supporting customers whose mortgage needs extend beyond their working lives.
“Whether it’s a first-time buyer purchasing late in life, a family using extra income to support a loved one on the property ladder, or a borrower planning retirement with confidence, our goal is the same: to give agents the tools, certainty and flexibility they need to help more clients find a place they can call home.”