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Buy to Let mortgages for older borrowers

The key information you need to know about buy to let mortgages for older borrowers and where to find the right advice.

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By Pete Mugleston   Mortgage Advisor

Last updated: 7th February 2019 *

We receive plenty of enquiries surrounding Buy to Let (BTL) mortgages, some of which come from older buyers who want to know if you can get a Buy to Let mortgage if you are retired and whether there is a maximum age limit on Buy to Let mortgages.

Read on to find the answers to these questions, as well as the upper age limits some providers impose when lending for Buy to Let mortgages, plus other influencing factors.

This article will be discussing:

  • Why get a BTL mortgage when retired?
  • How does age impact BTL mortgage eligibility?
  • How is affordability calculated for BTLs for older people?
  • Age limits for Buy to Let mortgages
  • Other factors impacting Buy to Let mortgage eligibility for retired
    people

    • Loan to Value (LTV)
    • Bad credit
    • Large loans
    • Property type

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Why invest in a Buy to Let mortgage after retirement?

Since the new pension rules were put into place by the UK government, older people have had more flexibility over what they can do with their retirement savings. Considering the rise in property prices over recent years, it’s no surprise that older people are keen to use some of their pension funds to invest in the property market.

Buy to Let for mortgages pensioners are a popular choice, but if you don’t have enough in the pension pot to purchase another property outright, you will have to look at getting a mortgage to cover the remaining sum.

How is affordability calculated for retirement Buy to Let mortgages?

When it comes to BTL mortgages, repayments aren’t usually covered by pension savings or work salary as with residentials. Instead, affordability will usually be determined by the expected rental income from tenants (alongside the usual factors such as loan to value (LTV) and other individual circumstances).

Buy to Let (BTL) mortgage age restrictions

While theoretically age should not be as big a concern for Buy to Let lenders as for a residential property, the reality is that it is still a factor and many borrowers do face upper age limits.

So, what is the maximum age to get a buy to let mortgage? And is it possible to get a Buy to Let mortgage with no age limit at all?

Generally speaking, the younger you are the less risk you pose and the wider choice of lenders you will be open to for a BTL loan (individual circumstances considered).

So if you’re aged between 60 - 65, you may be offered more favourable rates for a Buy to Let mortgage than if you’re 70 - 80 years old or over.

And yes, there are a handful of lenders out there who will insist on  no upper BTL age limits, as long as they are confident you can repay the mortgage during retirement.

It’s important to speak to a whole-of-market broker especially as an older BTL investor, and we will pass you over to a specialist to find the best deal for you.

Why does age impact eligibility for a BTL mortgage?

Historically, lenders have been more skeptical about offering older people any type of mortgage, especially if they are entering retirement with outstanding debt, such as repayments on their primary home.

Factors such as health and life expectancy also play a role, and many lenders have caps on the maximum age they are willing to lend to, or others will limit the term length if a borrower is over a certain age.

Other factors impacting Buy to let mortgage eligibility for older people

There are a few other factors to consider aside from age and predicted rental income when lenders assess BTL applications for pensioners:

Bad credit and Buy to Let mortgages for pensioners

Every lender has different criteria and requirements when it comes to bad credit, but if you have a history of adverse (depending on the severity), this is often less of a issue when it comes to BTLs as repayments are usually on an interest-only basis and will be covered by rental income.

Flexible adverse credit mortgage providers often base their lending decision on the severity of the credit issue and how long it has been on your file. For more information, check out our dedicated page on bad credit mortgages here.

Large loans and Buy to Let mortgages for pensioners

While some providers cap the amount they’re willing to lend you, particular lenders may be happy to authorise a large mortgage, taking into consideration age, health, or evidence that your investment can will yield a good return over a short period.

Contact us for more advice on this.

Property type and Buy to Let mortgages for pensioners

As with all non-standard property types (e.g. thatched roof, timber frame etc), lenders can be more cautious because they deem such constructions as higher risk and / or less sellable when the mortgage term is over. Again though, every lender has their own criteria and some may still consider you depending on the perceived risk of the property in question.

You can find more information about what is considered non-standard construction and how lenders typically treat these properties on our non-standard construction mortgages page,

Why you should speak to an expert later life mortgage broker

OMA offers a 5-star service with access to expert brokers who are:

  • Whole of market
  • Already know the lenders to go to as they successfully arrange these already.
  • OMA Accredited advisors
  • LIBF Training course

Moreover, seeking specialist advice is doubly important if you fall into any of the niches outlined in the section above (e.g. bad credit, non-standard construction). As an older borrower, you already belong to one niche category, and those who fall into two may find it more difficult to land a favourable deal without the help of a whole-of-market broker.

Speak to a Buy to Let retirement mortgage expert today

If you’re looking to invest in a buy to let mortgage in retirement or you’d like to know more, call Online Mortgage Advisor today on 0800 304 7880 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee, and there’s no obligation or marks on your credit rating.

Updated: 7th February 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information.

The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA.

Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

 

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