Banks to offer ‘mortgage for life’

OLDER borrowers may soon be offered mortgages that do not have to be repaid until they die or go into care.

These so-called ‘mortgages for life’ could be available by the middle of next year after the City watchdog revealed plans to give the loans the green light.

A number of smaller banks and building societies have already committed to offering this type of loan, with bigger lenders expected to follow suit.

The move is expected to throw a lifeline to the thousands of older borrowers trapped on interest-only mortgages that they cannot repay.

These homeowners would be able to continue to pay only the interest on their loan and not have to worry about selling their house to repay the debt.

OneSavings Bank said it would consider offering the new mortgages.

The bank’s sales director John Eastgate said: ‘Lending into retirement has been a major issue for the past couple of years.’