After years of struggling to find lenders willing to provide them with mortgages in later life, older borrowers are now being spoiled with options as high-street banks and building societies clamour to launch new products and change existing terms to meet an ageing population. 

In the last month the Nationwide Building Society, launched a new range of retirement mortgages to help older borrowers boost their retirement income and provide them with more flexible options to use the equity in their property.

It joins several other lenders offering mortgages specifically designed for older borrowers and retirees.

Last week, Santander increased the maximum age and term on its range of buy-to-let mortgages, which it stated was to meet the demand from its older customers.

Buy-to-let mortgage maximum age

Santander has increased the maximum age at the end of the mortgage term from 75 to 85, and the maximum mortgage term on its buy-to-let range from 25 years to 40 years.

This means that someone retiring at the age of 65 could potentially take out a buy-to-let mortgage with Santander for 20 years – provided they meet the bank’s criteria for lending.

Previously, the oldest you could be to take out a mortgage for the maximum term of 25 years was age 50; now, someone deciding to become a landlord at the age of 45 could borrow for four decades before the loan needs to be repaid.

Santander, however, is playing catch up with the rest of the buy-to-let mortgage market when it comes to lending well into retirement.

Recent Which? analysis of data from Moneyfacts has found that of 2,057 buy-to-let deals currently on the market, almost two thirds (65%) have a maximum age at the end of the term of 85 and above. Some 30% of the deals have a maximum age of 85, and 9% have a maximum age of 95. A fifth (20%) have no maximum age at all.

Buy-to-let mortgage terms: how long can you borrow for?

This year has seen the rise of the 40-year mortgage in the residential market, with more than 50% of deals currently available offering a maximum 40-year term – up from 36% back in 2014.

A four-decade term on a buy-to-let mortgage is less common – Which? analysis found that one in four (27%) have deals that allow you to borrow for 40 years.

The vast majority of buy-to-let mortgages (49%) have maximum terms of 35 years, while 18% have a maximum term of 25 years.

This means there are plenty of options for older buy-to-let borrowers – 55% of buy-to-let deals are available to those aged 50 at the start of the loan. However, a fair chunk have low maximum ages and shorter maximum terms. You should always seek the advice of your preferred independent financial adviser for up-to-date mortgage market advice.

Typically, you need to put 25% down on a buy-to-let property, but a number of lenders are offering deals with 20% and even 15% deposits.

Whilst we at Options Property Management can provide general advice on any potential rental property you have in mind and the rental yield a property might achieve, you should always seek specific financial advice from an independent financial adviser (IFA).

You should also be aware that landlords, however, are also facing a slew of new rules and regulations to abide by. Since the beginning of April, landlords have been forced to improve the energy efficiency of the properties or face a potential fine, while on 1 June, the government ban on charging tenants lettings fees will kick in, with costs falling to property owners.

If you are looking for a free no obligation rental valuation please complete our on-line valuation form at  https://www.optionspm.co.uk/#valuation  or call us on +44 1752 342727.