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New analysis of official mortgage figures has revealed how old UK mortgage borrowers are when they take out home loans at different loan-to-value limits. The analysis of FCA data on new mortgage sales by Royal London, the mutual insurer, reveals that borrowers aged 36-40 and above typically put down a deposit of at least 25% - a ‘tipping point’ for access to lower mortgage rates; below this age, borrowers are usually borrowing more than three quarters of the value of their property.

The age for reaching this tipping point has risen. In 2007, the majority of 31-35 year-olds were also able to find a 25% deposit, but by 2013, most of that age group were borrowing more than 75%; this reflects the rising average age of a first time buyer, up from 28 in 2007 to age 34 now. In the decade since the financial crisis there has been an increase back up to 2008 levels in the number of borrowers in all age brackets with relatively small deposits in the range 5%-25% and interestingly loans above 95 per cent have however remained a negligible part of the market since 2008;

The point at which homebuyers tend to borrow less than 30% of the value of their property has also risen in recent years. Back in 2007, borrowers had reached this point when they were 51 – 55, but in 2018, it was not until they were aged 56-60 that homebuyers were stumping up at least 70 per cent of the equity. The data also suggests that the majority of homeowners aged 51 or over who take out new loans are taking out a mortgage for less than half the value of their home compared to, in 2018, 46 per cent of borrowers aged 18 to 25 who borrowed more than 85 per cent of the value of their home.

However, the proportion of borrowers above retirement age (66 plus) borrowing 30 to 50 per cent of their property’s value has been steadily rising since the financial crisis, with 27 per cent of 66-70 year olds now taking out new mortgages with an LTV between 30 and 50 per cent, up from 21 per cent in 2009. Among 71 to 75 year old new mortgage applicants, 26 per cent are now borrowing between 30 and 50 per cent of their home’s value, up from 23 per cent 10 years ago.

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