The mortgage misconceptions brokers see every day: what our new research reveals about today’s borrowers
Brokers play a vital role in the mortgage market. They can help borrowers understand their options, as well as find, prepare and submit a mortgage application. At Suffolk Building Society, many of the applications we receive come from brokers on behalf of their clients.
Brokers will have an overview of the market and products currently available. In addition to giving advice, they have access to everything from current rates to lenders’ criteria.
With this in mind, we turned to the experts themselves to hear their thoughts and experiences. We surveyed a panel of 263 brokers about later life, intergenerational and expat mortgages. Here’s what we found:
More people are borrowing into later life
Sixty per cent of brokers say they have seen an increase in later life enquiries in the past 12 months. Only 3% saw a downturn in enquiries from borrowers aged over 55.
Brokers working on later life applications reported the most common reasons for seeking a mortgage over the age of 55:
66% said it was due to borrowers not being ready to repay their outstanding mortgage in full when reaching their mortgage term end.
47% said clients were looking to remortgage an existing property.
47% reported clients raising money to support family members (e.g. with a gifted deposit).
Changing personal circumstances were also a key driver. Forty-three per cent of brokers reported clients raising funds for home improvements, lifestyle, or debt consolidation. Thirty-one per cent said significant life events, such as divorce or illness, required borrowers to extend their mortgage term.
Balancing retirement planning with supporting family financially
A recurring theme was borrowers seeking to support younger family members whilst managing their own long-term financial security.
61% of brokers said their clients were concerned about finding the right balance between planning their own retirement and helping children, grandkids or other family members.
16% had worked with older borrowers looking to join a mortgage to help a family member. For example, through a joint borrower sole proprietor (JBSP) mortgage.
Intergenerational lending options can be useful for families in a range of situations. A JBSP mortgage, for example, allows up to four people to be named on a mortgage (boosting affordability) without all becoming legal owners of the property. This boosts affordability for the buyer(s) while those ‘helping’ don’t incur additional taxes. Find out more about Joint Borrower Sole Proprietor mortgages here.
You could have more mortgage options than you think
We found that older borrowers sometimes underestimate their options, assuming lenders will be more restrictive than they actually are.
Brokers highlighted several common misconceptions:
64% believed older borrowers still think all lenders impose age restrictions.
57% said older borrowers believe equity release is their only option.
55% had worked with older borrowers concerned about whether they could borrow over a long enough mortgage term.
54% said older clients were unaware of the different ways to demonstrate their ability to borrow, including through pensions and investments.
It’s a reminder that mortgage advice is just as valuable for experienced homeowners as for first time buyers. Always do your research before assuming you won’t qualify! This may include talking to a mortgage broker.
Expat mortgages: why specialist advice matters
Expat mortgages are another area where getting expert advice can make a real difference.
According to our survey, the challenges can begin before an application is even started. Brokers who work with expats reported that just 34% know they may need a dedicated expat mortgage.
For the application itself, proving income and affordability can be a significant hurdle. Overseas tax returns and payslips can make it more complicated to demonstrate affordability than with a standard UK mortgage application. Nearly two-thirds (62%) of brokers identified this as their biggest challenge when working with expat clients.
We also asked brokers where they believe they add the most value when helping expat borrowers. The responses highlighted three key areas:
88% said it was by identifying a lender willing to consider a customer’s personal circumstances, including their country of residence, tax status and income currency.
54% cited helping clients understand the different types of expat mortgages. This may include expat buy to let, consumer expat buy to let, expat holiday let or expat residential mortgages.
44% said they help clients understand the documentation required, which can be more complex than a standard UK mortgage application.
Whatever your situation, it pays to explore your options
Approaching retirement? Helping a family member buy their first home? Or perhaps you’re hoping to purchase a property while living overseas? You may have more options than you realise.
