Accord Mortgages is updating its criteria this week to better support residential interest only borrowers who are already retired or whose mortgage term would take them into retirement.

Accord will now consider interest only lending for borrowers who are already retired and want to use pension income to help with affordability, as long as the customer is no older than 70 years of age when the interest only term ends. Retired borrowers not using pension income however can be up to 80 years of age at the end of the mortgage term.

Borrowers planning to retire during the term of their mortgage can also be considered for an interest only term into retirement, if their income is not being used for affordability.

Accord will also consider joint interest only applications, where one borrower is retired or plans to retire during the mortgage term, as long as the second borrower will not be retiring at any point in the term, and can support the application’s affordability.

All interest only borrowers will still need to have a suitable repayment vehicle in place to repay the capital on their mortgage at the end of the mortgage term.

Nicola Alvarez, senior manager for new propositions at Accord, said: “We’re really pleased to be expanding our common-sense lending criteria to better support those who have taken early retirement or who plan to retire during their mortgage term.

“These changes give borrowers greater flexibility to fulfil a better retirement thanks to lower monthly repayments and we’re sure brokers will welcome being able to offer more options to clients in this position.”

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