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Monday, March 02, 2015

BTL mortgages for older applicants

From April 6 this year the Governments pension reforms will come into play, which means that people with a private pension could draw-down their whole pension fund when they reach the age of 55, instead of buying an annuity.

There is speculation that this could have quite an impact on the buy-to-let sector as the over 55s look to reinvest the money that they receive once the proposed changes come into effect.

From the perspective of a buy-to-let mortgage intermediary, this means that we could see a rise in the number of older buy-to-let applicants in the years ahead. As retirement ages also increase, many people will not be expecting to draw their pension until they are 65-70 years old.

So what are the options for older buy-to-let applicants? Currently many lenders have an upper age limit of 75 years old at the end of the term of the mortgage with a minimum term of 5 years. This could prove difficult for those who are already 70 or those looking for a longer term mortgage.

However, Precise, Kent Reliance and Aldermore all have an upper age limit of 85 years at the end of term and National Counties Building Society specifies no upper age limit. Again the minimum term with these lenders is 5 years.

As the buy-to-let mortgage market is expected to continue growing this year and beyond, we may see more lenders offering niche products to cater for the varied needs of buy-to-let property investors.

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