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Armed forces mortgages UK

How to get a mortgage if you’re in the armed forces or are ex-military.

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 4th December 2019 *

We support our servicemen and women and believe they shouldn’t be disadvantaged in any way. Sadly, this is sometimes the case as armed forces personnel face different problems to the civilian population when it comes to getting on the property ladder.

We get countless enquiries about military mortgages and the specialist advisors we work with have helped many army, navy and air force professionals achieve their plans on the home front.

This article covers the key intel you need to know about UK military mortgages.

You’ll find the following topics below…

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Are there mortgages for the military?

Yes! Servicemen and women can face unique challenges when it comes to getting on the property ladder. Entry-level soldiers often have relatively low income and even higher-ranked officers might find that their credit rating has been affected because they have been deployed to different parts of the country, and even to overseas territories.

But the good news is that there are specialist lenders who offer the following…

  • British army mortgages
  • Navy and army mortgages
  • Air force mortgages
  • Marine corps mortgages
  • Mortgages for ex-military personnel in the UK
  • Mortgages for armed forces personnel stationed abroad
  • Mortgages for civilian support staff

Read on to find out more about mortgage help for military members, or better yet, get in touch and the military mortgage specialists we work with will field your questions over the phone and connect you with a lender offering these products at favourable rates.

What kind of mortgage help is available for the military?

If you’re a member of the armed forces seeking a residential mortgage, it’s important to seek out specialist advice as certain high street providers may not understand the needs and challenges facing servicemen and women when it comes to the property ladder.

You should also be aware of the military mortgage help that is available for armed forces professionals. There are a number of schemes and support sources on offer, such as…

  • Increased lender flexibility
  • Forces Help to Buy
  • Long Service Advance of Pay

Help from specialist military mortgage lenders

Although you won’t come across many ‘military discount’ mortgage products, finding a specialist lender is important because they are more likely to be flexible and accommodating to the needs of servicemen and women, some of whom may have non-standard income and a poor credit rating due to be stationed in multiple locations, including overseas territories.

Providers which offer mortgage deals for armed forces personnel may do the following…

  • Allow military borrowers consent to let on a standard residential mortgage
  • Allow armed forces personnel stationed abroad to buy a home in the UK
  • Allow the property to go unoccupied for periods
  • Allow British armed forces to buy overseas

If your plans for the property market call for a lender which permits any of the above, get in touch and the advisors we work with connect you with the provider offering the best mortgage deals for military professionals, with the most favourable rates.

The Armed Forces Help to Buy scheme

Forces Help to Buy is a scheme for armed forces personnel to help them get onto the property ladder. It involves an interest-free loan to cover the deposit and other fees.

Below you will find an overview of the Forces Help to Buy scheme’s rules, based on the most frequently asked questions we receive about this initiative.

How much financial help do Forces Help to Buy mortgages offer?

Servicemen and women can borrow up to 50% of their annual salary interest free, to a maximum of £25,000. This can serve as a deposit, a percentage of the deposit or it could be put towards other costs and fees, such as solicitor and estate agent payments.

What type of homes does Forces Help to Buy cover?

The Forces Help to Buy mortgage scheme can help you out if you’re buying your first home, moving to another property on assignment, or because your family’s needs have changed.

Who can apply for Forces Help to Buy?

British army, navy and RAF personnel can apply for the Forces Help to Buy scheme, as well as servicemen and women in other fields, providing they meet the following criteria…

  • Have completed the required length of service
  • Have more than six months left to serve at the time of application
  • Meet the right medical categories (although exceptions can be made where extenuating medical/personal circumstances are evidenced)

What does the Forces Help to Buy application process involve?

Servicemen and women can apply for the scheme online via the Joint Personnel Administration system, an intranet-based system created by Electronic Data systems in partnership with the Ministry of Defence. It may be worth seeking advice regarding your application through your Chain of Command and personnel agency before you begin.

Moreover, you should also seek whole-of-market advice from a specialist armed forces mortgage broker before you start. Make an enquiry to be connected with one.

How does Forces Help to Buy repayment work?

The process of paying back a Forces Help to Buy loan usually plays out over the course of 10 years. You will gradually repay the loan amount over this period, and given that Forces Help to Buy is offered interest free, you will only pay back the amount you borrowed.

How long does it take to arrange a Forces Help to Buy mortgage?

Forces Help to Buy’s timescale typically requires a two-week draw down after approval. From here, the process of getting a mortgage is the same as it would be for a non-armed forces member, and the time it could take will vary from lender to lender. A typical house purchase can take around three months, but some deals are less complex than others.

When does Forces Help to Buy end?

The initiative was launched in April 2014 as a three-year pilot scheme. However, Forces Help to Buy has since been extended and its end date is now December 2019. New applications must be submitted by the end of that month, but do not have to be completed by then.

Can I use Forces Help to Buy with the government’s Help to Buy scheme?

Yes! Forces Help to Buy and the government’s Help to Buy scheme for civilians can be used in conjunction with one another at some lenders. Not all mortgage providers will be okay with you using both schemes, but the specialist ones who are more accommodating to military borrowers are in a position to allow this at their discretion.

Forces Help to Buy can provide you with a loan to help with your deposit and fees, while Help to Buy could help you secure a home with only a 5% deposit. The government offers a loan covering up to 20% of the property’s purchase price (interest free for five years) and the borrower take out a mortgage to cover the other 75%. The scheme is limited to new build properties which must serve as the borrower’s only residence after completion.

It is not available for investment properties or properties worth more than £600,000.

Can I use Forces Help to Buy with a Help to Buy ISA?

Some lenders may allow this as there are no restrictions preventing armed forces personnel from applying for a Help to Buy ISA. These ISAs were introduced as part of the Help to Buy scheme and they involve the government topping up what you have saved towards a mortgage deposit. For every £200 you save, you will receive a government bonus of £50. The minimum bonus they will pay out is £400 and the maximum is £3,000.

Using this scheme - which is usually limited to first time buyers - in conjunction with Forces Help to Buy could give you a little something extra to put towards your deposit.

Bear in mind that this scheme only open to new applicants until 31st December 2022. 

Can you use Forces Help to Buy with Shared Ownership?

Forces Help to Buy cannot be used for Shared Ownership or shared equity purchases, but there’s no reason why a serviceman or woman cannot find a favourable Shared Ownership deal independent of Forces Help to Buy. Get in touch to speak with a specialist military mortgage advisor who has access to every Shared Ownership lender on the market.

Can I take in a lodger?

It may be possible to take in a lodger if you bought your home through Forces Help to Buy as Forces Help to Buy mortgage lenders are typically more flexible when it comes to the needs of military borrowers. Some will allow you to rent your home out, even if you’re on a residential mortgage. Just be sure to inform them if somebody else is moving in.

Will I pay tax on a Forces Help to Buy loan?

In some cases, yes. HMRC consider an amount above £10,000 to be a beneficial loan which have personal tax implications. It’s important to weigh up every cost involved before taking on any debt, so get in touch and an expert advisor will outline all of them over the phone.

Is Forces Help to Buy available for ex-armed forces professionals?

No - you must have at least six months of services remaining at the time of application, but that doesn’t mean there is no help available for retired servicemen and women.

Specialist advice is essential for anyone who falls into this niche category, as some military professionals may have never owned a property before, or have spent a lot of time in military accommodation (either at home or abroad) during their career-long service. This could mean they have a limited borrowing record or bad credit.

Although you will not be eligible for Forces Help to Buy if you’re a retired military professional, schemes such as Help to Buy may be an option if you’ve never owned a property before, and there are also specialist mortgage products for retired borrowers.

Get in touch and the advisors we work with will go over every available option and connect you with the best mortgage lenders for ex-military personnel. They can also provide Forces Help to Buy advice if you’re still serving and think this may be an option.

Where can I find a Forces Help to Buy calculator?

A standard mortgage calculator can give you a rough idea of how much you could borrow through the Forces Help to Buy scheme - but a better alternative would be to make an enquiry and get whole-of-market advice from the brokers we work with.

Every lender uses a different mortgage calculator and take different factors into account when assessing your application. But a broker with access to the entire market can introduce you to the mortgage provider whose calculator is most likely to return favourable results for a borrower with your specific needs and circumstances.

Long Service Advance of Pay

Long Service Advance of Pay was scheme for UK armed forces personnel which pre-dated Forces Help to Buy. The initiative provided interest free loans of up to £8,500 to help servicemen and women get a foot onto the property ladder. It was suspended on 1st April 2014 to make way for Forces Help to Buy, and it’s unclear whether it will ever be reinstated.

Getting the best military mortgage rates

Schemes such as Forces Help to Buy can give you a helping hand when it comes to getting a mortgage deposit together and covering some of the fees, but when it comes to army, navy or RAF mortgage loans themselves, the rates they’re offered with are no different to civilian products. Lenders also take the same factors into account when determining eligibility.

Lenders will take the following into account when working on which rates they’re willing to offer you on a military mortgage…

Your deposit

The minimum deposit amount you will need for a residential mortgage is 5%, but the lender may ask for you to put down more if you’re a higher risk borrower due to factors such as your age, credit rating or the property having elements of non-standard construction.

The lender will also take the source of your deposit into account. If any of it has come from sources such as overseas investments, gifts or cash savings, this may restrict the number of approachable mortgage providers and increase the need for specialist advice.

You can read more about mortgage deposits here.

Your income and outgoings

Most providers would be willing to offer you a mortgage based on 4.5x your annual salary. Some will go up to 5 and a handful up to 6, under the right circumstances.

How you make your money is also taken into account. Some military and ex-military personnel might supplement their income with sources such as military disability benefits and Operation Allowance (sometimes called combat pay). This may require a specialist lender as not all mortgage providers allow income supplements, and some place a cap on the amount of additional income they’re willing to take into account.

Income will be offset against the borrower’s other significant outgoings. Having major debts such as personal loans and credit cards could affect the amount you’re able to borrow.

Your credit rating

Having adverse credit on your file can put of some mortgage lenders, while others might be reluctant to offer you their best rates or demand a higher deposit to offset some of the risk. That said, there are specialist lenders who cater for customers with various types of adverse.

Those who have served in the military often see their credit record impacted by overseas postings, so it’s important to seek specialist advice. Lenders who cater for customers with the above on their file are flexible enough to base their decision on the age of the credit issue, its severity and whether the borrower meets their other eligibility requirements.

Read more about bad credit mortgages.

Your age

Some lenders won’t offer mortgages to anyone over the age of 75, but others go up to 85 under the right circumstances. A minority are flexible enough to impose no upper age limit, as long as the borrower can prove they can repay the mortgage into retirement.

The property type

Whether you’re a solider, ex-military personnel or a civilian, the type of property you are after might have an impact on your eligibility for a mortgage. Unique properties, such as those with elements of non-standard construction (e.g. thatched roofs, timber frames) or listed buildings are considered higher risk, and therefore may call for a specialist lender.

It’s particularly important to seek advice from a whole of market expert if you belong to two niche categories (in this case unique property and the military) to boost your chances of getting a favourable deal, because the number of approachable lenders will be even fewer.

Can I get a buy to let mortgage if I’m in the armed forces?

Yes, but you won’t be able to use the Forces Help to Buy scheme because this is for main residence properties only. You would essentially be subject to the same criteria as a civilian who is applying for a BTL, although a specialist military mortgage lender may be more flexible when it comes to things like bad credit and complex income.

A higher deposit is typically required for a buy to let mortgage as the maximum loan to value ratio is often 85%. With some providers, though, income is less important as they may base their lending decision on the viability of the investment, i.e. whether the projected rental payments will cover the mortgage by 125%. Others, however, have minimum income requirements (especially for first-time landlords) and around £25,000 is standard.

For more information about buy to let mortgages, consult our dedicated page on the topic.

Speak to a military mortgages expert

If you need mortgage advice for armed forces and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 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 absolutely no obligation or marks on your credit rating.

Updated: 4th December 2019
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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.