Military & Armed Forces Mortgages

If you’re in the armed forces, and looking to buy a home, it can be difficult to find a lender that fully understands your circumstances. The good news is, some lenders specialise in offering mortgages to military personnel, and they are typically more flexible with their criteria.

In this article, we’ll look at how to get a military mortgage, what sort of help is available to those serving, and why specialist advice can make all the difference.

What are military mortgages?

There is no specific product known as a ‘Military mortgage’, but the term is often used to identify lenders that are open to applications from British service personnel.

Unfortunately, not all lenders are able to accommodate the unique circumstances faced by those serving in the Army, Navy, or Air Force, but those specialist lenders willing to offer military mortgages, will accept that:

• You may have more complex payslips that civilians struggle to understand
• You may be stationed away from home, or abroad, for extended periods
• Your credit score may be low due to frequently being re-stationed
• Lower-ranking personnel may be on a relatively low income

If you approach a forces-friendly lender, however, they may be willing to offer you some or all of the below opportunities:

• To buy a home abroad
• To buy a home in the UK using your BFPO address if you’re stationed abroad
• To leave your UK home unoccupied or offer you a ‘consent to let’ so that you can accept tenants whilst you are stationed elsewhere
• To use a deposit from the Forces Help to Buy Scheme
• To overlook low credit scores caused by frequent moves, or never having had credit agreements before

Types of mortgages available

Those lenders who are willing to consider military personnel will often allow you to take out any of their mortgage products, whether that be residential, buy-to-let or a remortgage.

For those struggling to get on the property ladder via a conventional mortgage, however, there are a range of schemes available to help you.

Forces Help to Buy Scheme (FHTB)

The most appropriate scheme for many service personnel, this scheme allows you to borrow up to 50% of your gross pay (including all forms of recruitment or retention pay) from the MOD, up to the value of £25,000 as a 10-year interest-free loan (You may be liable to pay tax on loans above £10,000)

Although the FHTB scheme was only originally intended to be available until the end of 2022, it was announced on 1st January 2023 that the scheme would now be available to all qualifying military personnel indefinitely.

What are the terms?

Loans can be used as or towards your deposit to buy a home, as well as to pay some of the associated costs, such as solicitors fees. You can only use one FHTB loan to purchase a property, even if both applicants are serving. If one earns more, it may, therefore, be best to take the scheme in their name.

To qualify you must:

• Be Army, Navy, or Air Force personnel in regular service (Navy must have been accepted onto trained strength, Army and RAF must have completed two years service from enlistment and have completed phase two training)
• Have more than six months left to serve
• Meet the right medical categories (exceptions can be made in extenuating medical/personal circumstances)
• Be purchasing your first home, or need to buy a new home due to permanent reassignment more than 50 miles from your current address
• Repay the loan within 10 years, or when you leave the service, whichever is first
• Be buying a home valued at under £600,000

How to apply

It’s strongly recommended that you seek advice from a specialist armed forces mortgage broker prior to making an application, as they will be able to advise you which lenders accept this form of deposit.

You can find out more about the scheme here or apply through the MOD’s Joint Personnel Administration system (JPA).

If you don’t have access to JPA, you can complete form E035, which you should be able to receive through your Chain of Command.

First Homes Scheme

This scheme created a network of affordable properties around the UK, offered at a 30% discount on the usual market value. It’s available to key workers, such as military personnel, and civilian first-time buyers, so long as they earn £80,000 or less (£90,000 in London).

The 30% discount stays with the property, to benefit those who need affordable homes, beyond the first owner.

You’ll usually need to provide at least a 5% deposit. As a serving member of the armed forces, you’re also able to disregard the local connection Claus that would usually apply.

Can you combine Forces Help to Buy with other schemes?

Yes, it can be used with the Shared Ownership scheme. As the First Home Scheme is still fairly new, it’s not known whether this can be used in conjunction with FHTB, however, it is not explicitly forbidden.

Not all mortgage lenders will accept the combining of more than one home ownership scheme, but a broker with experience in this area will be able to point you towards those that will.

How a broker can help

Finding a mortgage can be a complex business for those serving in the armed forces, especially when their duties often limit the free time available to deal with such matters. As not all lenders consider applicants who are currently serving, and even fewer accept the FHTB as a deposit, a broker with expertise and knowledge of obtaining military mortgages will be invaluable.

Your average civilian mortgage broker is unlikely to have an insight into the intricacies of the armed forces, your Chain of Command, and the unique challenges your occupation presents. We work with a network of brokers with specialist military knowledge who know exactly which lenders will consider your circumstances.

They can also be your point of contact throughout the majority of the mortgage application process, liaising on your behalf, and reporting back to you when you’re off duty, whether you’re stationed in the UK or abroad.

If you get in touch we will arrange for an advisor with the right experience in this area to contact you straight away.

Lenders and rates

There are no preferential rates available to those serving in the armed forces, so you can expect rates in line with the current average. The rate you are offered is generally based upon your individual circumstances, and how well you meet the below criteria.

The table below illustrates some of the best interest rates currently available (May 2023):

Please note that the above rates were accurate at the time of writing, but are always subject to change. Speaking to a mortgage broker is the best way to find the most up-to-date deals.

Eligibility criteria

Lender criteria vary depending on the type of mortgage you’re applying for, however, lenders will generally look at:

Get matched with a military mortgage expert

We highly value the contribution made by military personnel, and through our free broker-matching service, we can ensure that you are introduced to an expert that has plenty of experience in organising mortgages for those serving.

Whether you’re on active duty abroad, have a low credit score, or are looking for a lender willing to combine FHTB with another scheme, the brokers we work with can help you find the most suitable lender.

They charge on a success-only fee structure, so if they don’t secure you a mortgage, you won’t pay a penny, and any upfront fees will be refunded.

Get in touch now on 0808 189 0463 or make an enquiry, and we’ll find you an expert with the right military mortgage knowledge to find you the best possible deal.