It increases age of first death stress on its 50-plus product and moves to accept annexes across its product range
Specialist lender Hodge has increased the first death stress on its 50-plus mortgage product and enhanced criteria for annexes across its wider range.
The term ‘death stress’ is well known to intermediaries operating in the later-life lending space where joint borrowers over the age of 50 are lending into retirement. This stress test ensures the mortgage remains affordable for the surviving customer in the event of the death of their partner.
This enhancement follows a recent review of ONS data and an uplift in life expectancy, allowing the lender to increase the age at which the first death stress is applied from 82 to 87.
Additionally, the lender will now lend on properties with one fully self-contained annexe. These can be accepted if they are let on a short-term basis for holiday letting, or occupied by related parties to the property owner (family).
Hodge acknowledges that the number of homes with annexes in the UK is rising due to increased cross-generational living. This trend is driven by high childcare costs, families supporting their children in saving for their own property, and more people working from home.
“We continue to see demand for properties with a self-contained annexe as families look to support one another intergenerationally,” said Jonathan Matthews, head of property risk at Hodge. “This change represents further flexibility in our property criteria, removing any ambiguity around annexes for your customers.”
Emma Graham (pictured), business development manager at Hodge, added that the enhancement to the first death stress will enable customers to spread their mortgage across a longer term, making monthly payments more affordable as they lend up to and into their retirement.
“We continually strive to incorporate and reflect on the feedback we receive from brokers,” Graham said. “By implementing these latest changes, we aim to better support customers who need more flexible lending arrangements, especially in the current challenging market conditions.”
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