Image: Tagishsimon Image: Tagishsimon

Nationwide has raised its age limit for people paying off mortgages to 85, meaning a 60-year old could now take out a 25-year mortgage.

The new limit, which is a 10 year increase, adds to evidence of the impact of rising house prices and tougher lending rules on middle-aged people. Nationwide said it had seen "growing demand" from the generation.

Halifax too has raised its age limit, from 75 to 80.

With the average house price hitting £283,000 in February, and several mortgage lenders requiring a 10% deposit, first-time buyers are having to save nearly £30,000, meaning younger people are unable to afford their first home until their 30s and 40s. And with tougher affordability checks put in place after the financial crisis, the possibility of getting a mortgage at older ages is being squeezed as well.

To reduce the risk associated with older mortgage borrowers, Nationwide said the new age limit would only apply to existing customers with a loan limit of £150,000 and 60% of the property value.

Nationwide head of mortgages, Henry Jordan, said: "Access to the mainstream market has been a challenge for older customers, resulting in their needs going unfulfilled. This measure helps to address these needs in a prudent, controlled manner."

According to a recent survey by Halifax, a third of 20-45 year olds expect to work past their retirement age in order to pay off their mortgage, prompting the lender's decision to raise its age limit.