Mortgages in later life are changing, and brokers need to stay ahead. 

In our first webinar of the year, Tom Blackler and Deb Reeves shared key insights on lending into retirement. They showed brokers how to offer flexible mortgage solutions that better support their clients’ needs. 

What makes Perenna different? 

At Perenna, age is but a number. That is why we have removed age limits on some of our products, both at application and at the end of the mortgage term. 

Our goal? To help homeowners make the most of their retirement, with a mortgage that truly works for them. 

Key takeaways from the webinar 

Business Development Manager, Tom, highlighted key Perenna policies that are particularly beneficial for clients over 55: 

• Fixed for term mortgages – All Perenna mortgage products come with a fixed rate for the entire term. This means clients can count on a stable interest rate. And more importantly, a predictable monthly payment throughout the mortgage term. 

• Flexibility – While our mortgages are fixed for the full term, they come with a 5-year Early Repayment Charge. This means that after five years, clients can pay off their mortgage, remortgage with another lender, or stay on the same rate. If Perenna offers a lower rate, they can choose to switch through a product transfer. 

• Income multiples – Unlike other lenders, we base stress tests on the customer’s pay rate instead of the Standard Variable Rate (SVR). This allows us to lend up to 6 times income – up to 95% LTV, or 70% LTV for those 65+ at application and 85+ at term end. 

National Account Manager, Deb, explained how Perenna considers retirement income for customers: 

• Pensions & annuities – State, workplace, and private pensions are all accepted. 

• Drawdowns & SIPPs –We can use 4% of the total pension value as annual income, provided the client is not withdrawing more than that. 

• Rental income – This is considered if it is well-documented, sustainable, and factors in property costs. 

• Earned income – This can be used up to age 70. For clients who are more than 10 years from retirement and paying into a pension, earned income can still be considered, so long as less than half of the mortgage term remains before their retirement age (or age 70). 

Deb shared an example of a 59-year-old client, to show how mortgage terms are based on the expected retirement age. There may be some lenders that assume retirement at 70, but Perenna offers more choices, for self-employed and for office workers. 

For borrowers lending into retirement – either within 10 years of retirement or where at least half of the loan term falls during retirement – the Loan-to-Value (LTV) is typically capped at 70% to support long-term affordability. 

January’s webinar also covered Perenna’s Interest-Only and Retirement Interest-Only (RIO) mortgages – both built for long-term stability. 

Interest-Only mortgage criteria 

• Up to 25-year term 

• Maximum 75% LTV 

• No maximum age limit, as long as there is an alternative repayment plan. 

Retirement Interest-Only (RIO) mortgage criteria 

• Minimum age 50 

• Maximum 60% LTV 

• Affordability based on interest-only payments 

• Repayment triggered by a life event (e.g., death or long-term care) 

• Independent legal advice required for applicants aged 80+ at application 

Not sure which is best for your client? You can compare our product offering here. 

Q&A highlights  

Brokers raised key questions on affordability, joint applications, and rental income. A key topic was how we assess joint applications when one borrower is retired, and the other is still working. In these cases, we consider both incomes and overall affordability.  

Perenna’s Lending into Retirement policy gives brokers more options to help clients get long-term mortgage solutions. 

Do you want to learn more? Take a look at our intermediary website for full criteria details. 

Join our next webinar! 

Do not forget to join our next webinar on Thursday, 13th February. We will be talking about Perenna’s unique selling points. Register here and keep an eye on our socials for details! 

Correct at time of publishing. 

Often Equity Release is provided as the only solution for older borrowers. But today, I want to explore the full range of options available. 

My drive and passion around this subject are all about choice and advice. The freedom to make choices and access professional and considered advice. 

From a personal perspective, I look at my own parents and want them to spend what is theirs, enjoy retirement to the full and be comfortable in the choices they make! 

As for the ‘alternative,’ this is not just about an ‘alternative’ for now, but about a well-thought-out plan. It might mean that Equity Release is the ‘right fit’ or the best solution in several years’ time, but for today, it is about exploring all options. 

As a broker, I encourage you to consider what later life lending means to you. Do you see yourself as someone who handles it? Many brokers tell me they do not specialise in later life lending, but why not? If you have advised a client to take out a mortgage beyond retirement age, then in my view, you do – and you should not shy away from it. 

Later life lending could be a great option for many people in retirement. The freedom that the right type of borrowing can bring in later years may be life-changing for those who embrace it. Life is for living, and I encourage you to help more clients do just that! 

While equity release is absolutely one option, I want to focus on those customers who can afford monthly payments now, especially with long-term fixed rates. 

Long-term fixed rates = stability for older borrowers 

When it comes to securing a mortgage or a loan in later life, one of the big concerns for borrowers is interest rate volatility. Rising rates can lead to higher monthly payments, which is a concern for those on fixed incomes or pensions.  

Protect your clients from rate changes and give them peace of mind.  

With a Perenna mortgage, there are no early repayment charges after five years. This means your clients can explore options like Equity Release or others, without worrying about penalties. 

Let’s look at those ‘alternatives’.  

A traditional ‘term’ mortgage

Perenna has a genuine no maximum age policy. If a traditional mortgage is affordable, it may be the right option for some clients. With a long-term fixed rate mortgage, clients benefit from payment security while repaying capital, should that be their preference. This ties back to the point of financial freedom and choice in the here and now. The mortgage could be inherited along with the property when the time comes. The intergenerational aspect that these supports should be explored – after all, family homes are more than just bricks and mortar! Of course, the mortgage can still be paid off with the proceeds of sale if that is the right option for the family or those inheriting the property. 

Retirement interest only (RIO)

This option suits those who want to keep payments lower but prefer to pay monthly interest rather than allowing it to roll up. This helps preserve the home’s equity. At Perenna, we’ve found that brokers have welcomed the option to use ‘downsizing’ in the event of the first death, which avoids the death stress test applied by some lenders (subject to minimum equity and the ability to downsize). RIO mortgages open that halfway house between a traditional mortgage and Equity Release and should not be discounted as an option. It could great solution for the right clients. 

Please do not assume that older borrowers can’t be helped. In some cases, the days of paying off a mortgage at retirement with a pension lump sum are not feasible. More positively, the days of limited choices – where clients were forced to downsize or rent due to a lack of mortgage options – are gone! 

Whether clients are coming to the end of an interest-only mortgage term without a repayment plan, need funds for home improvements, want to help family members onto the property ladder, secure the dream holiday, or are planning long-term estate solutions, there is now a range of options. These choices support financial freedom at any age. 

This is sensible, responsible lending, supporting sensible, responsible mortgage advice. 

So next time you have a client that is looking at their options in later-life. Ask yourself, whether you’ve presented all of the options.  

See how Perenna can help today.  

Use Perenna’s affordability calculator 

Written by Perenna’s National Account Manager, Deborah Reeves 

Correct at time of publishing. 

Is Perenna new to you, or have you not used us for a while? 

Join our webinar on Thursday, 13th February, from 12 PM to 1 PM GMT. 

Graham Laverty, Intermediary Support Manager, and Janet Frame, Business Development Manager, will explain our range and lending criteria. 

This session is perfect for those new to Perenna or anyone needing a quick update! 

Date: Thursday, 13th February 

Time: 12:00 PM GMT 

Platform: Microsoft Teams 

Register here: https://events.teams.microsoft.com/event/f756e46f-4d99-46ce-a866-740e7c0d8875@961e4b01-2f89-42cf-b991-aa3f575c5152] 

We look forward to helping you and your clients!

Correct at time of publishing.