Buy-to-let mortgages for older borrowers: how does age and lending work?

Many people assume that getting a mortgage later in life is difficult, if not impossible. While this can sometimes be the case for residential mortgages, buy-to-let lending works differently. Because rental income is expected to cover the mortgage payments, lenders often take a more flexible approach, particularly when it comes to age. A large number of lenders will consider applications up to age 80–85, and some even have no maximum age limit at all. This means that it is still possible to take out a buy-to-let mortgage or remortgage an existing buy-to-let property at an older age.

Another common misconception is that buy-to-let mortgages are assessed in the same way as residential mortgages, with a heavy focus on the borrower’s personal income. In reality, lenders assess affordability by looking at the rental income generated by the property. They apply what is known as a rental coverage ratio to ensure that the expected rent comfortably covers the mortgage payments, with an additional margin for safety. Personal income may still be taken into account, but it is usually secondary, which makes buy-to-let mortgages accessible for those who are retired or have limited earned income.

The amount that can be borrowed is also linked to the property’s value. Most lenders allow borrowing up to 75% loan-to-value (LTV), although in some cases this can be capped at 65% depending on the lender and circumstances. In practice, this means that a deposit or equity of between 25% and 35% is usually required.Taken together, these factors show that age is not necessarily a barrier to accessing buy-to-let finance. The flexibility around age and affordability means that lending decisions are based more on the property’s financial performance than on the borrower’s stage of life, making buy-to-let mortgages a realistic option for older investors who may wish to remortgage, raise capital or purchase additional property.