Is there a buy to let mortgage age limit?

There are several criteria commonly used by lenders when considering an application for a buy to let (BTL) mortgage. Although how these criteria are applied might vary from time to time and from one mortgage lender to another, the following are typical factors:

you need to be interested in investing in residential property; you understand and accept the risks of such investments; your financial circumstances mean you can afford to take those risks; you have a sound credit record – and, preferably, own your own home; and until very recently, at least, you have to have been no older than 70 to 75 years of age when the mortgage came to its full term. So, for example,  a 25-year buy to let mortgage taken out by someone as young as 45 would not end until they reached the age of 70. Is there still a BTL mortgage age limit?

In recent years, mortgage lenders generally seem to have adopted a far more relaxed attitude towards those upper age limits. Read more

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What are interest-only mortgages?

Interest-only (IO) mortgages are becoming popular, said the Financial Adviser magazine last year. Indeed, interest-only mortgages accounted for 20% of all new mortgages granted during the second quarter of 2019 – a significant increase in the 15% market share enjoyed by this type of mortgage five years’ previously.

So, what are IO mortgages, what are their attractions, and what do you need to consider before arranging one?

What is an interest-only mortgage?

If you can get a mortgage and only ever have to repay the interest on the loan, of course, that is going to be popular. But that is not the case with the interest-only mortgage – which you might think to be something of a misnomer.

Naturally, the capital needs to be repaid at some time. But in this case that repayment is delayed until the end of the mortgage term. In the meantime, your monthly payment will simply cover the interest on the amount you borrowed.

Make no d…

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Mortgages for people aged 60 and over

As you get older, it becomes increasingly more challenging to get a mortgage.

From the mortgage lender’s point of view, the reasoning may be understandable. Mortgages are designed to be repayable over many years’ – 20, 25 or even 30 years, let’s say. For anyone taking on a mortgage when they are aged 60 or over, therefore, they are likely to be well over 80 years old before the mortgage reaches full term.

Along with all the usual calculations based on your current income, expenditure, credit record, and loan to value (LTV) ratios, therefore, any lender may also need to start looking at your income during retirement when determining the affordability of any loan – in other words, what your pension is likely to be worth and the affordability of the mortgage repayments.

Against those difficulties and the natural wariness of mortgage lenders, however, it must also be recognised that the population is ageing and that we are all living longer lives. …

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Retirement interest-only mortgages explained

Interest-only mortgages have the attraction of relatively lower monthly repayment costs – you are only repaying the interest in those instalments and delay repayment of the capital amount until the end of the mortgage term.

Apart from that broad appeal, however, interest-only mortgages may have a particular appeal to the older homeowner – and these are called retirement interest-only mortgages, or RIO mortgages.

When they first appeared on the market, take-up of these retirement mortgages was relatively muted, argued an article in the FT Adviser on the 25th of June 2020. At that time, around 12 different lenders were offering 38 RIO mortgages of one type or another. That number has now grown to 20 lenders with 87 products on offer.

What are retirement interest-only mortgages (RIOs)?

Retirement interest-only mortgages are only available for those over the age of 55. They are likely to be a particular interest to older borrowers who are in or …

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