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Mortgages for soldiers

Mortgages for soldiers

Pete Mugleston

To find out exactly what your eligible for and at what rates please or give us a call on 0800 304 7880.

I made a search online recently for a customer of mine who is in the army looking for information on the armed forces subsidies and schemes to help with property purchases, and found that there is a LOT of incorrect and nonsense info on what’s available. So I have decided to collate the up to date and accurate advice so our servicemen and women have the facts.

Whether you’re a Brigadier on level 5 income, or a new entrant – they brokers we work with understand how it works and have access to the whole market, so they know which lenders can offer the solution to best meet your requirements.

To get a quote or make an enquiry right away, use our application form or give us a call on 0800 304 7880.

What is an army mortgage?

Army mortgages, military mortgages, mortgages for heroes, etc. are all the same thing, and basically describe any mortgage that would suit any member of the MOD requiring help or support in purchasing a property.

What help is there for soldiers and MOD staff to buy property?

Increased lender flexibility

Often members of the armed forces can be penalised when it comes to borrowing, through no fault of their own (in most cases!), because they may move regularly or be stationed abroad for periods of time, which may then affect their credit rating. Mortgage lenders may therefore be less likely to accept an application when compared to other mainstream occupations. Luckily, there are lenders out there who understand, and adopt a more common sense approach, allowing for more flexible and unique underwriting criteria. These lenders are happy with differing income types, or the fact you may be stationed abroad for example.

Armed forces home ownership scheme (AFHOS)

UPDATE | The AFHOS has now lent all the money available and is no longer accepting applications under the current scheme. As the scheme was a pilot, we do anticipate there being further developments in the near future. Please note: You will only be eligible for this scheme if you have between 4-6 years continuous service. This is a pilot scheme that started in 2010 and will run until March 2014.
It’s a fantastic and unique financial product supported by the government that puts members of the MOD in touch with affordable housing, managed by the Homes and Communities Agency (HCA), and only available in England (there are other separate schemes for Scotland and Wales). The scheme allows servicemen to purchase any property up to £300,000 using a mortgage and an equity loan provided by the HCA, which is secured on the property. The maximum loan available is £75k, and on it you pay NO fees or interest – you just pay it back when you sell the property (But, if you leave the forces then you do start incurring costs- albeit still very affordable). You are usually required to put in a small amount of cash deposit yourself, the amount of which depends on your personal financial review, which will establish you capacity to borrow and the maximum equity loan you can take.

Long service Advance of Pay (LSAP)

This is great for army staff looking to purchase a property with little or no deposit, especially first time buyers (although it is also available for home movers).
The MOD recognises that employees stationed in the UK and abroad may be tired of forces accommodation, and be interested in buying their own property. The scheme has been developed specifically to give eligible personnel access to an £8,500 interest free loan which can be put towards the purchase of a property, whether that be for deposit or set up fees etc.

How much can I borrow?
The lower of £8,500 or 182 days pay.

How much will it cost?
The loan is interest free, so technically it won’t cost you a thing! You will however, be required to pay it back over a 10 year period (usually), which if you took the full 8,500 would be approx. £75pm. You also need to bear in mind that any amount over £5,000 is taxable as a benefit in kind.

Who is eligible?

  • Those that have at least 4 years of service
  • Serving with 3 months or more before discharge
  • That have not been warned with discharge
  • Must be fit medically
  • Must not have applied for Premature Voluntary Release (PVR)
  • Must not to have taken any terminal benefit
  • Those who will only own one property
  • Property must be in the UK, Channel Islands, Isle of Man, or Republic of Ireland.

Key worker mortgages

Some ministry of defence mortgages can fall under the part of the more widely available ‘key worker‘ benefit, rolled out by the government to help improve the access to affordable housing in certain areas of the country. There are 4 main schemes as part of the program that include a free equity loan for help with your deposit (that you don’t have to repay until you sell), the option for support in shared ownership applications, and subsidised rent on certain properties. Click the links for more info.

Who qualifies for army mortgages?

Any military serving in the British Army, Navy, Marines, Air corps etc.: Either front line in active service, civilian support staff, or retired ex-army employees, whether stationed in the UK or abroad. Of course, you will still have to meet standard lending criteria in terms of supplying adequate deposit, having appropriate credit history, and meeting affordability requirements.

Are there any mortgage discounts or offers for Army staff?

The truth is you won’t find many ‘army exclusive’ products on the high street or online, and rarely do lenders put on discounts through these channels either – the mortgages for military officers are often just the same deals available to any other occupation.

So what’s special about armed forces mortgages?

The key factor to army mortgages is the lenders who offer specific criteria to accommodate specialist and often unique requirements. For instance:

  • Allowing military personnel to rent out their property on a standard residential mortgage
  • Allowing armed forces stationed abroad to purchase in the UK
  • Allowing the property to go unoccupied for periods.
  • Allowing armed forces to purchase overseas

I’m in the army, can I buy abroad?

Yes, there are special mortgages for the armed forces overseas. You can purchase property abroad, and would do so through our international mortgage specialists, who have years of experience arranging purchases for the army and other occupations all over the world. We find that our customers really value this expert service as we are familiar with the unique processes and requirements that countries abroad often demand – an important service to avoid getting ripped off!

I have a poor credit rating, can I get a mortgage?

Part and parcel of the job is travel, and when you’re away fighting for queen and country, mortgages and finance is the last thing you need to be concerned about. We understand that being asked to relocate at short notice, or take your family across the globe, which can have knock on effects to your credit rating. Luckily, there are still lenders out there that consider applicants with adverse credit and consider each mortgage on a case by case basis, avoiding awkward and frustrating ‘computer says no’ scenarios. It really depends on how your credit file looks, how recent and severe the issues were, and how much deposit/equity you’ll have with your new mortgage.

Insurance specially for the armed forces

You and your family need protecting, and life cover is essential to ensure your mortgage is paid and family looked after financially should anything happen. It’s important to get the proper advice when it comes to life insurance, as many policies don’t cover the armed forces in the event of death in the line of duty. We have access to the whole market and will quote every insurer to find you the best policies that give you the most comprehensive cover at affordable prices. Visit our life insurance page for a quote, or give us a call on 0800 304 7880.

How can we help?

The army love the specialists we pass your enquiries to because:

  • They are whole of market | with access to direct and broker exclusive forces products.
  • They are independent | giving you the best advice for you, not whats best for us.
  • They are experienced | the advisers are highly trained, fully qualified, with a wealth of experience with the armed forces.

They can support applications over the phone and internet so if you are currently stationed abroad or are on a tight timescale we can still help you. They will always keep you updated every step of the way, and liaise with you at all Key stages of the application. They understand how members of the army are paid, how the pay structures work, and why you may require more specialist flexibility when it comes to purchasing property.

The brokers we work with have access to the whole market and know lender criteria inside and out, so we know the lenders that cater for applicants with:

  • Bad credit
  • Low deposit
  • Big deposits
  • The need to rent out the property
  • Variable income
  • etc…

They have the knowledge and experience to be best placed helping you throughout the process, taking you from enquiry to getting the keys.

You can also find out about life insurance for those in the armed forces here.

How do I apply?

If you’re ready to make an application or if you just have an enquiry, please fill out our quick form below and an expert will be in touch ASAP. If you require help immediate assistance please give us a call.


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