What Are The Age Limits For Buy to Let Mortgages?

Age limits are something you’ll come across with buy-to-let mortgages. 

Generally, these limits fall between 21 to 75 years, but there’s room for variation. 

Many lenders have a starting point of 21 years for applicants, yet some are open to considering those as young as 18. This shows a level of flexibility for younger borrowers.

On the flip side, the situation looks a bit different for older applicants. 

If you’re over 60, especially if you’re a retiree relying on a pension or other income, you still have a good chance of finding mortgage options. Yet, it’s true that the variety of choices might shrink as you move past 75 years. 

Lenders often review these applications on a case-by-case basis, sometimes allowing for exceptions if the other applicant on a joint mortgage is younger.

Why Are There Age Limits On Buy to Let Mortgages?

Lenders set age limits on buy to let mortgages mainly to manage risk. 

Young people might not have a long credit history or enough income history, making it tough for lenders to figure out how risky lending to them would be.

On the other hand, older people, especially those over 50, 60, or 75, might face challenges in keeping up with payments because of retirement, existing debts, or health concerns.

Despite these age-related guidelines, buy to let mortgages can be more lenient than residential ones. With the help of an experienced broker, age and income might not be big obstacles. This help can open up possibilities for buying property at any age, ensuring everyone has the chance to invest.

How Age Influences Your Buy To Let Application

Age impacts your buy to let mortgage application, but maybe not as much as you’d think. 

Here’s a look at what matters.

Borrowing Amount

Mainly, what you can borrow hinges on the property’s potential rental income. 

Your age might play a role if, for example, you’re retired and your income isn’t as high as someone working full-time. Lenders might see this as a bigger risk.

Mortgage Term

Lenders may offer shorter mortgage terms as you get older to manage their risk. 

For example, if their age limit is 80 and you’re applying at 70, you might be offered a mortgage term of only 10 years. This ensures all payments are completed by the time you reach their specified age limit.

Deposit Size

Your age generally doesn’t affect how much deposit you need to put down. 

Yet, some lenders might ask for a bigger deposit from older borrowers to reduce the loan-to-value ratio. 

Self-Employment

If you’re self-employed, age can affect your application differently. 

Some lenders might be more flexible, but they still have upper age limits. It varies widely, from 55 to even 95, showing that being self-employed brings its own set of rules when it comes to age.

A good mortgage broker gets you the right deal, even at your age. They know which lenders are open with older borrowers and will find a mortgage that fits you.

How To Get Buy To Let Mortgage For Retired Person?

The key to getting a buy-to-let mortgage lies in finding the right lenders. But how do you go about this? 

Here’s a walk in the process: 

1. Consult a Buy to Let Mortgage Broker

Kick things off by chatting with a mortgage broker who knows the ins and outs of buy-to-let properties. 

They’re like your personal guide, helping you navigate the market and pinpoint lenders that are pensioner-friendly.

2. Gather Necessary Documentation

Time to get your paperwork in order. 

This includes details about the rental income you’re expecting (needs to be 125% to 145%), which should ideally cover your loan interest and other bits and bobs. 

Don’t forget to include information on your pension, investments, and assets.

3. Prepare for a Significant Deposit

You’ll need to have a chunky deposit ready, typically 25-40% of the property’s value. It sounds a lot, but it’s a common ask for retirees stepping into the buy-to-let scene.

4. Select the Right Property

Think about what renters are looking for and the property’s future resale value. Places in popular areas usually tick these boxes, making them a hit with lenders too.

5. Apply for the Mortgage

With your broker’s help, find a lender that fits the bill and submit your application. Your broker will be there to ensure you show your best side.

6. Property Survey and Mortgage Offer

Expect the lender to do a bit of homework on the property to check its value and rental potential. If all goes well, they’ll make you a mortgage offer.

7. Legal Checks and Conveyancing

Engage with a legal professional on your side to deal with the nitty-gritty of buying property, from searches to signing contracts.

8. Finalise the Purchase

With the legal stuff sorted and the mortgage offer in hand, you’re all set to seal the deal and get the keys to your new investment.

9. Prepare for Letting

Before tenants can move in, make sure your property is in tip-top shape. This might mean a lick of paint or getting all the required safety checks done.

10. Continuous Management

Owning a rental property is a bit like running a small business. There’s the day-to-day management, keeping up with mortgage payments, and making sure it stays a worthwhile investment.

>> Read more about Buy To Mortgage.

The Pros and Cons of Buy-to-Let Mortgages for Retired Persons

As with every decision you make there are consequences. This goes the same with buy-to-let mortgages. Here are the benefits and drawbacks to consider: 

Pros
– Boosts your retirement income through steady rent payments.
– Offers the chance for your investment to grow as property values increase.
– Allows you to leave a valuable asset for your family’s future.
– Provides financial flexibility by using the property as security.
– Benefits from UK pension rules that support property investment in retirement

Cons
– Requires ongoing maintenance and tenant management, which can be burdensome.
– Brings the risk of unpredictable rental income and potential vacancies.
– Involves navigating complex legal and financial matters.
– May become overwhelming without proper support, especially as you age.
– Incurs additional costs, such as repairs and maintenance, which can add up over time.

Tips For A Smooth Mortgage Application as an Older Borrower

In every mortgage deal, preparation is key. Here’s are some tips to get you ready for your buy-to-let application:

  • Keep Your Finances Strong. Make sure you have a solid credit score and stable income. Having a larger deposit can also help balance out any concerns lenders might have about your age.
  • Consider a Joint Application. Applying with a younger family member could make lenders more comfortable about long-term repayments.
  • Highlight the Property’s Earning Potential. Show lenders that the property you want to buy has good potential for rental income. This proves you can keep up with mortgage payments.
  • Be Clear About Your Retirement Income. Lenders will want to know about your pensions, investments, or any other money you have coming in during retirement.
  • Look for Specialist Lenders. As we’ve mentioned, some lenders offer mortgages specifically for older borrowers and might have more flexible rules about age.

Key Takeaways

  • Buy-to-let mortgage age limits typically range from 21 to 75 years, but some lenders may consider applicants as young as 18.
  • Older applicants, particularly those over 60, have options but may find fewer choices beyond 75 years.
  • Age can influence the amount you can borrow, the mortgage term offered, and potentially the size of the deposit required.
  • Lenders set age limits to manage risks associated with borrowers’ credit history and income stability.

The Bottom Line

Age limits do play a role in getting a buy-to-let mortgage, but don’t worry if you think you’re too young or too old for real estate investment. What you really need is the right advice.

The first step? Talk to a trusted mortgage broker who knows all about buy-to-let mortgages. They’re experts at finding solutions that fit exactly what you need, no matter your age or how much you know about property investment.

These pros will take a good look at your finances and what you want to achieve. Then, they’ll help you find a lender that’s just right for you, focusing on factors like your age and how much you earn.

Whether you’re just starting or ready to grow your property collection, a mortgage advisor can make everything smoother and simpler. 

Ready to get started? Contact us, and we’ll connect you with a top-notch mortgage broker to help you snag the best deal for your situation and goals.