Buy-to-Let Mortgages for Older Borrowers

Being an older borrower needn’t stop you from getting a buy-to-let mortgage. In this article, we’ll look at how your age can impact how much you can borrow and why working with a specialist broker will open up more options for you.

Is there an age limit for buy-to-let mortgages?

Yes, limits are sometimes put in place by buy-to-let mortgage lenders. It might surprise you to hear, but there can be both upper and lower age limits for applicants – typically 18-75 years of age. However, these age brackets often vary between lenders.

Under 21 years old

You usually need to be at least 21 years old to get a BTL with most lenders. However, quite a few are now willing to accept 18-year-old applicants. It can also sometimes still be possible to get a joint buy-to-let mortgage if you’re 18 years old, as long as the other applicant is over 21.

Over 60s and buy-to-let mortgages

At the other end of the spectrum, the maximum age limit for a BTL mortgage is often at the discretion of the lender. For a retired person of 65 with an income or a pension, you should still have a lot of buy-to-let mortgage options. For older borrowers and especially for those over 75, you’ll likely find your pool of BTL choices becoming more limited.

Why lenders have buy-to-let age limits

There are a few reasons these age limits are in place for buy-to-let mortgages in the UK, but it’s largely to do with affordability and your ability to maintain payments.

Minimum age limit

On the lower end, minimum age limits can be there because younger borrowers don’t have enough credit history for lenders to judge them and calculate the investment risk. Younger borrowers also won’t have much of an income history or the opportunity to build up their salary or savings.

Maximum age limit

For older borrowers, the main risk for lenders is that in retirement, you may not be able to keep up with your payments. At older ages, including over 50s, 60s and 75s, you may also have existing debt commitments or potential health issues that could impair your ability to pay off the buy-to-let mortgage.

That said, age and income are far less significant for buy-to-let mortgages than residential mortgages and, with the right professional support and advice from a skilled broker, age shouldn’t stop you from buying the BTL property you want.

How to get a buy-to-let mortgage if you’re an older borrower

The first thing to do is to get in touch and let us match you with a buy-to-let broker with experience in older borrowers. They will have access to specialist lenders that you might not be able to find on your own and will be able to guide you through the application process.

Your broker will help you:

Calculate how much you might be able to borrow

Based on your age, the property type and financial factors such as your income, pension and projected rental income from your buy-to-let property, your broker can help you work out exactly how much you may be eligible to borrow on a buy-to-let mortgage.

Fix your deposit

Deposit requirements for buy-to-let mortgages are higher than for residential mortgages but the bigger the deposit you can put down, the better terms and rates you may be able to access. As an older borrower, you may benefit from higher levels of savings or have the potential to leverage existing assets to get a better deal.

Identify the right lenders

Many of these loans will be reviewed on a case-by-case basis, so using a skilled advisor means you can be introduced to the right lender with the flexibility to suit your plans.

How your age can impact mortgage eligibility maximum borrowing

Age is a much less significant factor for a buy-to-let mortgage than for a residential mortgage, but depending on the lender you approach, there may still be a few ways that age can impact buy-to-let mortgage eligibility criteria:

• How much you can borrow:  Strictly speaking the amount you can borrow is based on your projected rental income rather than your age. However, age can indirectly impact the maximum you can borrow if you are retired and on a lower income than somebody younger in full-time work and your lender perceives this as a risk.

• Term length:  As you move into the later stages of life or become retired, you may be offered a shorter term length for a buy-to-let mortgage as a compromise. This is to offset some of the risk for lenders. This is usually based on an upper age limit at the end of the mortgage term. For example, Natwest has a maximum age at the end of the term of 80. This means that if you are 70 when you’re applying, the maximum term length will be ten years.

• Larger deposit:  Generally speaking, as long as you meet the eligibility criteria, your age shouldn’t impact deposit requirements. That said, some lenders do impose LTV limits dependent on age. The Mortgage Works for example cap LTV at 65% for lenders aged 70 or over. Your broker will be able to identify the right lenders for you based on your available deposit.

• Self-employed:  If you’re self-employed, quite a few lenders will have maximum age limits. These can range anywhere from 55 all the way up to 95 for buy-to-let mortgages. Self-employed age limits are not necessarily lower than other age limits. Swansea Building Society for example has a maximum age on application of 84 if you’re retired, 74 if you’re self-employed and 69 if you’re employed.

Lenders and rates for older borrowers

These days there are plenty of lenders willing to consider older borrowers. But, whether you’re in your 50s, 60s, 70s, or even older, it can reduce your options.

The table below illustrates the interest rates currently available.

The rates quoted above were correct at the time of writing and are subject to change at any time at the lender’s discretion. Speaking to a mortgage broker is the best way to keep track of the rates available at any given time.

Pros and cons of getting a buy-to-let mortgage as a retired person

Having an investment property in retirement can be a great asset. But in some instances, it can also be a burden as you grow older.

Here’s a quick breakdown of some of the major benefits and drawbacks to think about:

Pros:

• An added passive income stream to supplement your lifestyle.
• It can be a solid investment in a strong housing market.
• Access to a valuable asset that you can eventually pass on.
• The opportunity to leverage the home to use as security if needed.
• There are favourable UK pension rules for buying property in retirement.

Cons:

• The responsibility of maintaining another house.
• It can be a significant liability if you don’t get proper support.
• You may have to plan for periods of low or no rental income.
• There will be added costs to think about like repairs and maintenance.

How Online Mortgage Advisor can help you secure a buy-to-let mortgage in later life

Buy-to-let mortgages are now much more accessible to older borrowers. Yet, your age can still limit your options and impact the terms you’re offered. So it’s crucial to speak with a mortgage broker who specialises in arranging buy-to-let agreements if you want the best mortgage deal available.

We offer a free, broker-matching service. This means we’ll quickly assess your age and circumstances, and then pair you up with an experienced buy-to-let mortgage broker.

We’ll set up a no-obligation chat between you and your ideal BTL mortgage broker today. Just call 0808 189 2301 or make an enquiry if you’d like to discuss your plans with an industry expert.