Yahoo Finance The jobs that could stop you getting a mortgage
Firefighters, police officers and construction workers are the least likely to qualify for a 40-year mortgage, brokers have warned.
First-time buyers in careers with early average retirement ages, either because of ill health or physical fitness requirements, may need to prove they have alternative career plans in order to get a loan.
Dariusz Karpowicz of broker Albion Financial Advice said buyers in these industries “face more scrutiny and challenges” compared to roles such as accountants, because of their statistically lower retirement ages.
Around 21pc of first-time buyers are taking mortgages with terms longer than 35 years, up from just 9pc in March 2022, according to data from industry body UK Finance.
Stretching a mortgage term beyond 30 years allows buyers to borrow more and keep their monthly payments down, making it initially more affordable to get a foot on the ladder.
One in five first-time buyers is now over the age of 40, according to lender Santander, and in 2022 the average age of those getting on to the housing ladder for the first time was 36.
This means that a 40-year mortgage would not be paid off until the age of 76 for the average first-time buyer, raising concerns about affordability in retirement.
Mr Karpowicz said: “Jobs that involve physical labour or have higher risks of early retirement due to health issues might struggle to secure a longer-term mortgage.
“This means professions like construction workers, firefighters and certain healthcare roles might face more scrutiny and challenges when applying for these extended terms.”
Many lenders have firm age requirements for mortgages.
Scottish Widows, for example, has a maximum age of 80 for all mortgage terms, and 70 if any part of the mortgage is on an interest-only basis.
Adrian Anderson, of mortgage broker Anderson Harris, said that while the lenders may not refuse outright to lend over longer terms to those who will not be able to work in their role for the full 40 years, house buyers would need to prove that they had thought about how they would pay their mortgage.
“If someone is an accountant and they say they are going to work until age 75, I don’t think they are going to ask any questions,” he said.
“But if they are in certain occupations, then the bank could be asking some questions about the plausibility and it could get knocked back a bit.”
Simon Bridgland of financial advisers Release Freedom said that those working “off the tools” in construction would still be able to take out longer terms.
He said: “If an applicant is self-employed and running their own business, but ‘off the tools’, underwriters will consider this as feasible if no longer taking a day-to-day part in completing work other than being perhaps office-based.”
There is no longer a compulsory retirement age for police officers, although many retire from 55.
Among junior officers, 14.5pc of those aged 50-54 stopped work in 2021, the second-highest share of any job cohort in the country.
Firefighters have a normal retirement age of 55, although they are allowed to work for longer if they are physically able to.
In the year ending March 2023, just 3.6pc of full-time firefighters were aged 56 or over, according to official Home Office figures.
Most mortgages are offered at the underwriters’ discretion, meaning that if a homebuyer can prove that they have plans to work elsewhere until a later age, they will be able to take out a longer term.
Longer terms became much more popular in the wake of Liz Truss’ disastrous mini-budget, as mortgage rates soared.
The average two-year fix with a 75pc loan-to-value (LTV) is now 5.89pc, whereas a five-year fix stands at 5.39pc, according to data from comparison website Uswitch.
At the end of 2021, the average fixed-rate mortgage had an interest rate of just 1.94pc, according to data from the Office of National Statistics.
Charles Roe, UK finance director of mortgages, said: “Lenders will look at prospective borrowers’ financial circumstances when making a decision, but this doesn’t generally entail particular occupations facing more scrutiny than others.
“We would encourage customers to speak to an independent mortgage adviser to discuss the best options available for their specific circumstances.”
