Older borrowers have traditionally struggled to secure mortgages with limited options available to them, but lenders are waking up to the opportunities of an ageing population raising maximum age limits and reviewing the length of their mortgage terms.
In a move to support demand from older borrowers, Santander has increased the maximum age for its buy-to-let mortgages from 75 to 85 years, opening the market to potential investors who at 65 years could enter the buy-to-let mortgage with a 20–year mortgage, and providing remortgage opportunities for existing landlords.
However, they are not the only lender to see the benefits of supporting older investors. According to Moneyfacts of 2,057 buy-to-let deals currently available, 65% have a maximum age at the end of the term of 85 years or more, and 20% have no maximum age limit at all.
Longer buy-to-let mortgage terms
Although Santander may be playing catch up when it comes to maximum age limits the move to increase the mortgage terms on their buy-to-let range from 25 to 40 years could be a game changer for some prospective borrowers, who at 45 years now have the option of a 40–year mortgage term on a buy-to-let property.
Which? reports that a four-decade term on a buy-to-let mortgage is much less common. Their analysis shows that only one in four lenders have deals that permit borrowing over 40 years. In fact, most buy-to-lets have a maximum term of 35 years.
Graham Sellar, head of channel development at Santander, said “We’ve seen a demand from older customers. People can decide to live off a rental income when looking at their future, and by broadening our terms, advisers have more options to present to their clients.”
