Buy to Let Mortgages for Over 65s
Buy to Let Mortgages for Over 65s
Finding the right buy to let mortgage deal can often be difficult and time consuming, and it gets no easier as you get older. It is not uncommon to see lenders imposing age restricting requirements on their buy to let mortgage packages, making it harder for investors over the age of 65 to find a competitive mortgage deal.
The good news is that in the last few years lender criteria has become more enlightened and there are a number of lenders who will lend on investment properties beyond the age of 65.
There are now significantly more buy to let mortgage options available for investors over the age of 65. With this in mind, here are a number of factors that you should look at when shopping around.
1. Lenders criteria
2. Fixed rate or variable rate
3. Mortgage interest rate
4. Lender admin fees
5. Your eligibility
In addition there have been some changes to how the buy to let market is regulated and taxed.
Changes to tax rules
From 2017, landlords can no longer deduct all of the financial expenses that arise from their property to calculate their profits at the end of the financial year. Thus, many landlords will see their tax bill increase next year.
The changes in the tax rules do not affect limited companies. The position for limited companies remains the same and only their profits are taxed.
As a result, many private landlords may look into setting up limited companies to circumvent the new tax rules. However, before setting up a limited company there are some associated costs that should be considered.
Changes to regulation
The way the buy to let mortgage market is regulated has changed and as such lenders have changed the way they review applications for buy to let mortgages.
Lenders will require applicants to have a higher rental coverage ratio than before. Prior to the changes in 2017, landlords only needed a rental coverage ratio of 125%. Nowadays lender will likely require landlords to have a rental coverage ratio of 145% for buy to let properties and 170% for houses in multiple occupation buy to lets.
In addition, lenders will require a professional surveyor valuation to be the basis of the rental coverage ratio.
This increase of rental coverage ratio is there to act as a 'safety net' to account for any period of time that the property is without tenants.
Lenders will also apply a stricter income stress test. In order to meet the criteria of the stress test, landlords will have to illustrate that they can afford mortgage payments in the event that interest rates increase to 5.5%.
Finally, lenders will take an in-depth review of the applicant's property portfolio. This is because lenders will no longer approve mortgages to landlords, if they have one or more properties that are not profitable. Therefore, unlike in years past, landlords cannot spread equity across their portfolios.
Specialist buy to let advice
The process of finding a buy to let mortgage can be challenging depending on your requirements. As you get older the process can be a little more complex as some lenders impose specific age restricting criteria that might affect your eligibility. We have a team of specialist financial advisers experienced in assisting over 65 year old investors find the perfect buy to let mortgage deal for them.
If you think you might benefit from the aid of an independent mortgage adviser, you can fill in our online contact form to request a call back from our buy to let advisory team, who can provide you with a free initial consultation about mortgages, or you can contact us directly on 0117 403 4222.
Our Buy to Let Mortgage Service
Special Features of what we offer our older investors
• One to one personal telephone service with our expert mortgage advisers
• We have lenders who do not see age as a barrier to getting finance
• We have access to exclusive deals that are not available on the high street
• We work with most UK leaders to offer a whole of market service
• We have a team of advisors experienced in finding investors over the age of 65 great buy to let mortgage deals.
• We can provide a quick turnaround Speak to us today if you need to move quickly.