MoCo allows mortgages up to age 80

[Brendan Burgess]

A mortgage until you’re 80? – new lender MoCo to offer later life loans

New lender MoCo is prepared to issue mortgages that people can pay off until the age of 80.

www.independent.ie

Its credit policy states: “Max term of up to 35 years. Max terms to applicant age of 80.”

Asked if it was not irresponsible to let people pay a mortgage until the age of 80, long after the official retirement age, a spokesperson for MoCo said: “MoCo’s credit policy provides for a maximum age of 80 at the end of the mortgage term.

“Where a borrower is expected to be in retirement during any part of the mortgage term, an enhanced individual assessment will be carried out, with a prudent approach taken in relation to ongoing income and affordability in retirement, including review of documentation from the borrower’s qualified financial advisor where applicable.”

 

[Brendan Burgess]

I did a piece on Newstalk this morning about it. My take...

Could be useful for people separating in their 40s or 50s who can't buy a second home at the moment because of the existing limit of 70.
It might also be better for some people to max their pension rather than pay capital off their mortgage.

If someone has a good pension on retirement, why not allow them service a mortgage from it?

Could be used in conjunction with Spry's life loan to allow people hold onto their homes.

Brendan

 

[odyssey06]

I wonder how they will deal with insurance... will they be ok if the cover runs until 65 or will alternative life cover need to be in place. Most standard policies won't run until 80.

 

[Brendan Burgess]

Good question, but they could waive the insurance.

Exceptions to the legal requirement to have mortgage protection insurance

You do not have to take out mortgage protection insurance if:

You are over 50 years old
The mortgage is not on your principal private residence (your home)
You already have enough life insurance to pay off the home loan if you die
You cannot get this insurance, for example, because of a current serious illness or dangerous job

So I suppose that if a 45 year old applied for a mortgage and asked for a policy to age 80 and was refused, MoCo would accept that.

Brendan

 

[Dr Strangelove]

Slightly OT but public service workers all get lump sums on retirement, as much as 1.5x gross salary tax free.

AFAIK lenders don’t explicitly take account of this.

 

[Brendan Burgess]

Yes, and they have good pensions as well, so most would be able to afford mortgage repayments at some level, up to the age of 80.

Brendan

 

[Monbretia]

Some people have fine pensions, I see nothing wrong with having a longer term if lender is satisfied that pension income will be sufficient. It was common enough years ago when I was in lending to have terms up to age 70 where sufficient pension provision was in place. In fact my manager once got a mortgage application through for a man who was nearer 80 at the time of taking out the mortgage! Hard to believe I know but there was substantial extra security in place and tons of life cover, think it was a 10 yr term and he didn't die before it was up either.