The Ipswich Building Society has decided to no longer be operating ‘later life’ mortgages aimed solely at over 50s, opting instead to combine its ranges into a single set of standard residential mortgage.
The mutual, which is to rebrand to the Suffolk Building Society later in 2021, has no maximum age caps on its standard residential products taken on repayment terms. Interest-only products will be capped at age 95 at the end of the term.
The society will, however, be retaining an exclusive option for later life applicants with a minimum age of 55. The two-year discount rate product comes with no early repayment charges, which the society believes will provide older borrowers with flexibility should they have a sudden change in circumstances.
In line with its lending criteria, Ipswich Building Society operates maximum LTVs depending on borrower retirement status and repayment type. They are 75% LTV for applicants borrowing into retirement and maximum 70% LTV for applicants in retirement (maximum 50% if any element is interest-only).
For working applicants, the society will continue to accept self employed manual workers, or those with an employed income, to age 70 (or declared pension age if lower), or those with self employed non-manual incomes to age 75.
Charlotte Grimshaw (pictured), head of intermediary relations at the Ipswich Building Society said: “We remain absolutely committed to later life lending as we understand the challenges many older borrowers have faced in the past and continue to face today. In many circumstances, older borrowers present a low risk to lenders because their pensionable income is stable and guaranteed and therefore, it simply makes sense that they can select from the same products as other borrowers.
“We know that being tied in to any financial product later in life may be a concern for intermediary clients, which is why we’ve decided to retain an option for now which is specifically aimed at this group. With no early repayment charges, borrowers will have peace of mind that should they need to downsize or should their health take a downturn, they are able to pay off their mortgage with no additional costs.
“As part of the product redesign, we will also be introducing specific, separate products for borrowing taken out on an interest only basis (including part and part) and on a repayment basis. Splitting products by repayment type will make it easier for intermediaries to identify the different options available for their clients, as well as allow us to have closer monitoring and control over our product proposition.”
DIPs on withdrawn products will be accepted until 5pm Wednesday 12 May. All DIPs received prior to the deadline will be honoured and no deadline is set for subsequent fully packaged applications.