Buy to Let Mortgages Up To Age 85
Buy to Let Mortgages Up to Age 85
In the past older investors have had to choose from a limited selection when it comes to purchasing a buy to let mortgage, as lenders often impose unfair upper age limits on their financial products, making many investors in their 60s, 70s and 80s ineligible for their mortgage deals.
However, with an increasing awareness of people living longer, lenders have started to loosen the age requirements on their mortgage packages, meaning investors up to the age of 85 now have a wide range of options available to them when purchasing their buy to let mortgages!
With the increasing range of buy to let mortgage deals now available to older investors, it can often be hard to sift through all of the packages to decide which one is best for you. If you’re unsure how to make the best choice to meet your mortgage goals, a good place to start is to compare the different interest rates, admin fees, lenders criteria and the type of rate offered on each deal and analyse what suits you best.
If you need a buy to let mortgage, you may benefit from reviewing the changes to the buy to let mortgage market.
Tax relief rule changes
From 2017, landlords cannot deduct their entire financial costs that arise from their buy to let properties whilst calculating their profits for the year. This means that landlords' tax bills will increase.
Although the new rules have already come into force, they do not apply to limited companies and as such only their profits will be subject to tax.
Due to the tax rule changes, many private landlords are looking to set up their own limited company to avoid an larger tax bill.
However, it should be noted that there are some associated costs with setting up a limited company.
Regulation rule changes
There have been some changes to the way in which the buy to let mortgage market is regulated. These changes have altered the way lenders consider buy to let mortgage applications.
Firstly, lenders will now require a review of the landlord's entire property portfolio. This is because lenders will no longer grant a buy to let mortgage to a landlord with one or more properties that do not provide a positive return. Ultimately, this means lenders cannot consider a buy to let property in isolation anymore and landlords can no longer spread their equity across their portfolio.
Secondly, to successfully secure a buy to let mortgage, a landlord will require a rental coverage ratio of 145% for a standard buy to let and 170% for a house in multiple occupation buy to let. The additional 45% to 75% is to account for any period of time where the property is without tenants.
Lenders will not accept a landlord simply stating how much they intend to rent the property out for; instead they will require a valuation from a professional surveyor.
Finally, lenders will apply a stricter income stress test than before. Lenders will require landlords to demonstrate that they can afford mortgage payments in the event that interest rates increase to 5.5%. This is to minimise the risk of the landlord falling into arrears on their mortgage payments in the future.
How we can help
Taking out a buy to let mortgage can be a difficult process, and even when you know what you’re looking for, you’re still likely to benefit from speaking to a mortgage broker or independent financial adviser. In addition to giving you personal assistance and helping you to analyse your personal situation, we also have access to a range of exclusive deals and leading rates that you won’t find on the high street.
Our buy to let mortgage advisory team are experienced in assisting investors up to the age of 85. So if you feel that 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. We can provide you with a free initial consultation about mortgages, or you can contact us directly on 0117 403 4474.