The higher threshold will be limited to products at 60% loan-to-value and loans under £150,000.
Nationwide Building Society will up its maximum lending age from 75 to 85 in July – meaning the society will have the highest age threshold of any high street lender.
The higher threshold will be limited to products at 60% loan-to-value and loans under £150,000.
Nationwide said the change will be the first in a series of enhancements designed to support borrowers in retirement.
Henry Jordan, Nationwide head of mortgages, said: “We are taking a series of steps to meet a growing demand from customers to be able to borrow in later life. These customers are often asset rich, with significant equity in their home, and they wish to have the flexibility to borrow against it.
“Access to the mainstream market has been a challenge for older customers, resulting in their needs going unfulfilled. This measure helps to address these needs in a prudent, controlled manner. Nationwide is committed to providing a range of options for all customers and this will be the first step toward developing a wider range of options for those looking to borrow into retirement.”
The change will enable customers with retirement income to borrow up to the age of 80.
From today Halifax is increasing its maximum lending age from 75 to 80.
Pete Mugleston, director of Online Mortgage Advisor, said:“Whilst I strongly believe people should plan to repay their mortgages as speedily as affordable, and that paying a mortgage in retirement is an unattractive prospect for many - there are those who want and can do so.
"There will be many legitimate and appropriate reasons, for example, owners of large portfolios or estates with plenty of passive income, or those who plan to use a lump sum to repay the loan early (many use bonuses, inheritance, investments or pension lump sums etc.) with no real intention of borrowing that long but would prefer a cheaper monthly payment.
“It’s all good and well for lenders to allow borrowers to still be paying back well into their 80’s, but advisers arranging these loans will have to ask the question why the borrower wants a mortgage so far into later life? If it's simply because the loan is at the limit of affordability now, and stretching the term makes it just fit into the monthly budget, what happens when interest rates increase?
"Is it a more sensible idea to perhaps look to borrow less?”
Hugh Wade-Jones, managing director at Enness Private Clients, added: “It’s good to see the mainstream market finally responding to industry calls for fairer treatment of elderly borrowers’ mortgage requirements.
"We have seen the local building societies loosen maximum age criteria over the course of the year and it’s great to see Nationwide and Halifax follow suit.
"There is still more to be done, however; we have many clients adversely affected by these arbitrary rules.
"Some have warned the knock-on effect of younger borrowers now having the ability to take a repayment mortgage until a much later age will further inflate house prices.
"However, as long as lenders continue to lend in a considered way, I think this is unlikely.”
