It is no secret that buy-to-let properties can generate a decent amount of passive income for landlords within the right circumstances.
Such properties are purchased for the sole reason of renting out. And the money you generate from the rent can be used alongside existing income.
On that note, these properties could be especially helpful for those who have retired or are about to retire. These individuals may not have a steady stream of income, which makes rental income from buy-to-let properties beneficial.
But before you can get such a property, you must consider the mortgage if it is required. And when it comes to older borrowers over 60 years of age, the regulations of such mortgages may be slightly different.
Now you might ask – how different are buy-to-let mortgages for over 60s? Well, that is what we are here to find out. So, jump in if you’re curious!
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Buy-To-Let Mortgages for Over 60s
Let’s briefly discuss the age limits for buy-to-let mortgages. Yes, buy-to-let mortgages do have some age restrictions in place, contrary to what you may have heard before.
However because the main component of the affordability assessment is the rent rather than earned income, these tend to be less stricter age requirements when compared to buy to let mortgages.
Generally, the upper age limit for getting a BTL mortgage is 75 years, which means that you can apply for such a mortgage if you have just crossed 60. But as mentioned above, typically a lot of BTL lenders can be more flexible as the rental income theoretically should not be age dependent.
Most mortgage providers have a lower age limit of 21 years before you can apply. But some lenders nowadays have started approving mortgages for people as young as 18.
However, since this article deals with Buy-To-Let mortgages for over 60s, let’s focus on the upper age limit for now. There are a couple of reasons why lenders may have stricter requirements.
Given the fact that such individual may be retired, their ability to support the rent with earned income may be lesser, so there could be more of a concern over rental voids.
Specifically when taking terms to a very late age, there is the factor to consider of old-age mortality, which could alter and effect the repayment of the mortgage loan.
If the borrower happens to pass away due to their age, it can make collecting the remaining mortgage amount more of a problem for the lenders.
Naturally, the above factors increase the financial risks associated with the mortgage. And that is why there are only a few providers willing to approve BTL mortgages for those of a very later age.
To be able to pinpoint an exact age where this piece of criteria would begin to apply is difficult as many lenders see it differently.
How Does Your Age Affect Buy-To-Let Mortgages?
Now, let’s take a look at what makes this mortgage different for those above 60.
Term Length
The most obvious difference is the term length for your mortgage. Potentially It will be shorter than the length of BTL mortgages for younger applicants. This allows the lender to collect the entire mortgage amount quickly, which helps to minimise risks.
Additionally, this may reduce the pressure on the landlord theoretically as they are not taking the mortgage to such a late age.
Frequently Asked Questions
1. Where Can You Get Buy-To-Let Mortgages for Over 60s?
BTL mortgages are provided by most of the reputed banks and some specialist lenders. So, you will need to visit these places to apply for a mortgage. This aspect applies to everyone, not just to people over 60.
2. Should You Consult A Specialist Before Applying For A BTL Mortgage?
Yes, it is always a wise idea to consult a professional mortgage advisor before moving forward. This is especially true for those above 60 since they may require special guidance from these advisors to secure the mortgage.
Conclusion
That brings us to the end of this brief guide. So, if you are above 60 and are thinking of purchasing a buy-to-let property for passive income, hopefully you will find this information helpful.
If your finances are good and your credit history is clean, then you shouldn’t have a lot of trouble getting the mortgage. But if that’s not the case, then you might need to reconsider your decision.
Of course, you can always seek help from a professional advisor for help, since they will be able to recommend the best course of action.
**A buy to let mortgage will be secured against your property.
Some types of buy to let mortgages are not regulated by the Financial Conduct Authority.
All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.
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