'More than two in five mortgages now extend beyond pension age,' warns MD
The mortgage market has been anything but predictable recently, and Graeme Nichols (pictured), managing director of West End Mortgages, knows this better than most. When the Bank of England cut the base rate to 5%, many assumed it would ease mortgage rates. Instead, the response from lenders defied expectations.
“When the Bank of England reduced the base rate quite recently, a number of lenders that week, and even that day, actually nudged their fixed rates upwards,” Nichols explained.
For first-time buyers, the situation is challenging, but many are stepping into the market due to external pressures. Nichols pointed out a noticeable rise in activity among this group.
“We found a lot of them actually [wondering whether] now is the time,” he said. “The majority of buyers that we are seeing just now in the West End Glasgow market are first-time buyers.”
Some lenders are responding with adjustments that make purchasing slightly easier. “The likes of Nationwide and Halifax have started to help first-time buyers,” Nichols noted. “And lenders are improving their affordability to allow clients to borrow more.”
‘Mum or Dad can come on board’
Increased lending limits tied to income, and enticing features like cashback deals, have given many first-time buyers a boost. However, Nichols highlighted the role of family in assisting many younger buyers to enter the market.
“Mum or Dad can come on board to give them a real boost for affordability purposes,” he said. In these cases, parents prefer to put down a deposit and help with a mortgage rather than pay steep rental costs for their children.
The Scottish Government’s housing emergency declaration has underscored the dire state of the market, but Nichols remarked that its impact on his daily work remains limited.
“I can honestly say that that has no real impact,” he said. However, he acknowledged broader trends, such as Glasgow’s rising property prices, as significant challenges for buyers.
A growing trend of mortgages extending beyond traditional retirement ages also raises concerns.
“More than two in five mortgages now extend beyond pension age,” he explained.
And, while lenders increasingly allow terms up to age 75, the financial implications are often overlooked. Many buyers opt for these extended terms to lower monthly payments, but Nichols advises caution. “When you demonstrate the amount of interest they actually pay with a 35- or 40-year mortgage, it can be eye watering, and people often don’t realise this,” he said.
His solution lies in clear, realistic conversations with clients.
“Quite often the difference is not huge,” he said, describing how he compares monthly payments across different terms. Showing the total amount payable over time often persuades clients to shorten their mortgage terms. “Would you rather find that £80 a month and be able to take five years off your mortgage?” he asked.
‘The key is really speaking properly to your clients’
For Nichols, these discussions define his role. Clients frequently arrive with preconceived ideas, often shaped by online calculators, but leave with plans that align better with their long-term goals.
“The key is really speaking properly to your clients and reminding them that you’re the expert,” he emphasised. Allowing buyers to simply follow their instincts without deeper advice risks leading them toward decisions they may later regret.
While market pressures remain high, Nichols sees his role as critical in helping buyers navigate the current landscape. Landlords exiting the rental market, unpredictable lending conditions, and extended mortgage terms create challenges that demand expertise and adaptability. For first-time buyers, clear guidance and tailored strategies remain essential, and Nichols’ approach ensures they are equipped to make informed decisions.
“Once you really drill into this and explore all the options, I find the vast majority of the time, what they came in thinking about is quite often different to what they actually leave with,” he said.
