Hodge has increased the first death stress on its 50+ product and enhanced criteria for annexes across its wider range.
The specialist lender says that 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, Hodge says.
This enhancement is based on a recent review of ONS data and an uplift in life expectancy enabling the lender to increase the age at which the first death stress is applied up to age 87; an increase from 82 previously.
In addition, the lender will now lend on properties that have one fully self-contained annexe. These can now be accepted providing they are let on a short-term basis for holiday letting or occupied by related parties to the property owner (family).
Hodge says the move is in recognition of the fact that the number of homes with annexes in the UK is on the rise due to an increase in cross-generational living caused by childcare costs, an increasing number of families supporting their children in saving for their own property, and greater numbers of people working from home.
Jonathan Matthews, head of property risk at Hodge, said: “We continue to see demand for properties with a self-contained annexe as families look to support one another intergenerationally. This change represents further flexibility in our property criteria, removing any ambiguity around annexes for your customers.”
Emma Graham (pictured), Hodge’s business development manager, added: “This enhancement to the first death stress will enable customers to spread their mortgage across a longer mortgage 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. By implementing these latest changes, we aim to better support customers who need more flexible lending arrangements, especially in the current challenging market conditions.”