Buying Your Home for Life After Service

Who this guide is for

Whether you're planning to leave the Armed Forces in the next year or your leaving date is still several years away, it's worth thinking about where you might want to live afterwards. You may already know where you'd like home to be, or you may not have decided yet. Either way, leaving it too late to plan your home purchase could mean you're unable to buy the home you want — or even buy a home at all.

While you're serving, your Armed Forces income may put you in a good position to buy a home. But as your leaving date approaches, lenders may need to consider what income you'll have after Service instead. If you haven't secured a civilian job, and don't have sufficient other income, this could affect whether you're able to buy a home. This guide explains why timing matters, how you could buy your future home well before leaving Service, and what options may still be available if your leaving date is getting closer.

01: Start planning your future home early

If you're living in SFA or SLA, buying your own home might seem like something you don't need to think about until you're preparing to leave Service. But you don't necessarily have to wait. You could buy a home to live in now, buy somewhere for your family while you continue serving, or buy your future home and rent it out until you're ready to move in.

You might also decide to stay in military accommodation and build your savings, or wait until your plans become clearer. There is no single right answer. The important thing is to understand your options early, while you still have the freedom to choose, rather than letting your leaving date make the decision for you.

02: Buying your future home while you're still serving

It might be near family and friends, your partner’s work, your children’s schools or the place you have always planned to settle. If you already know where you want to live after Service, it may be possible to buy there well before you leave.

Buy it now, rent it out and move in later

What if someone else could be paying towards your future home while you are still living in military accommodation? You may be able to buy the home you eventually want to live in, rent it out while you continue serving, and move into it when you leave. Because you're serving and living in military accommodation, some lenders recognise your particular situation and may allow you to use one of their residential mortgages, with a deposit as low as 5%.

This is quite different from a conventional Buy to Let mortgage, which often requires a much larger deposit and can have higher interest rates and fees. Not every lender treats this situation in the same way, and not every mortgage adviser will be familiar with these arrangements. That's why it's so important to speak to an Armed Forces mortgage adviser who understands which lenders recognise your military circumstances and how these mortgages work.

The lender must know and agree from the outset that you intend to rent the property out. You'll also need to understand the mortgage conditions, your responsibilities as a landlord and the costs involved, including periods when you might not have a tenant. But think about the longer-term benefit: when you eventually leave Service, you could already own the home you want to live in, without having to arrange the purchase and secure a mortgage after your military income has ended.

Your family could move in before you do

Another possibility is for your partner and family to move into your new home while you continue serving, even if you have several years of Service remaining. This could allow your family to settle into their new home long before you leave.

If you buy a home near your base, you would normally be expected to live there yourself. But if your new home is too far away for a reasonable daily commute, you could live in Single Living Accommodation (SLA) while you're working and return home when you're not. Normally, your family home must be more than 50 miles from your duty station to qualify for the Dual Accommodation Waiver, although exceptions may be considered where the journey takes more than 90 minutes. If you meet the conditions, you may be able to use SLA without paying accommodation charges.

03: Why your leaving date could affect your mortgage

While you're serving and your Armed Forces income is expected to continue, lenders can generally use that income when working out how much you could borrow. This is one reason buying your future home well before leaving Service can be an advantage. As your leaving date gets closer, however, lenders may need to consider what income you'll have afterwards.

When your leaving date is getting closer

As you approach the end of your Service, lenders may start looking more closely at how long your military income is expected to continue. There isn't a single point at which every lender changes how it assesses your income. Some may consider your position individually when you still have 12–18 months of Service remaining, while others may require evidence of your income after Service as your leaving date gets closer. With less than six months remaining, securing a mortgage could become particularly difficult without a confirmed source of income afterwards. This is why the timing of your mortgage application can be important.

Another important factor is whether your leaving date is already known. If you've formally given notice to leave, you should tell your mortgage adviser, as lenders will need to take this into account. Your leaving date might also be known because you're approaching retirement or the end of your agreed Service.

If you're approaching the end of your current engagement but intend to continue serving, whether your extension has already been agreed or is still being arranged could make a difference to how a lender assesses your income.

The important point is that you don't necessarily have to wait until your military salary stops before your leaving date affects your ability to get a mortgage. Understanding this early could make a significant difference to your plans to buy a home.

If you're leaving soon and have a civilian job lined up

If your leaving date is getting closer and you've already secured a civilian job, you might not need to wait until you've started work before applying for a mortgage. Some lenders will consider your new salary if you have a confirmed job offer or employment contract. They may also take into account your partner's earnings, an Armed Forces pension or other regular income. Lenders may also consider when your new job is due to start and whether there will be a gap between leaving Service and starting work.

If you're leaving soon without a civilian job lined up

If your military income is coming to an end and you haven't secured a civilian job or don't have sufficient other income, you may find it difficult to get a mortgage, even though you're still receiving your Service salary.

You don't necessarily need to buy a home years before leaving Service. But understanding how your leaving date could affect your ability to buy gives you the opportunity to plan ahead, rather than discovering the problem when it's too late.

04: Forces Help to Buy before you leave

Forces Help to Buy could provide up to £25,000 towards your deposit and other buying costs. However, you must have more than six months left to serve when you apply. If you've already given notice or applied to leave early, you won't normally qualify unless you're due a payment on leaving that's greater than the Forces Help to Buy amount you're requesting.

The scheme is intended to help you buy a home for yourself or your family to live in. You cannot use Forces Help to Buy to purchase a property that you intend to rent out from the outset.

Where you buy also matters. If your new home is within 50 miles of your base, you'll normally be expected to live there rather than continue using SFA or SLA. If it's further away, you can normally use SLA while you're serving, but won't normally be entitled to SFA. If you're subsequently posted more than 50 miles from your home, your entitlement to Service accommodation can change.

Any Forces Help to Buy you still owe must be repaid when you leave the Armed Forces. The outstanding balance may be deducted from payments you receive on leaving, including an Early Departure Payment or Resettlement Grant. You should plan for this in advance, as you cannot simply continue making the usual monthly repayments after leaving Service.

Our separate Forces Help to Buy guide explains the full eligibility rules, how to apply and how the scheme works alongside your mortgage.

05: What to do next

You don't need to have found a property or be ready to buy before speaking to a mortgage adviser. In fact, the earlier you understand what's possible, the more options you may have.

If you're still several years away from leaving Service, now could be a good time to explore whether buying your future home while you're serving would work for you. You may be surprised at what's possible, particularly if you're considering renting it out until you're ready to move in.

If your leaving date is getting closer, it's important to act now. As we've explained, lenders may no longer be able to use your military salary when assessing your mortgage application, even while you're still serving. Without a confirmed civilian income or sufficient other income, you could find yourself unable to buy the home you want. There may still be options available, but the longer you leave it, the more limited those options could become.

Our separate Buying Your First Home While Serving guide explains more about the home-buying process.

More than just mortgage advice

Not every mortgage adviser will be familiar with the options available to serving personnel, particularly when buying a future home to rent out while still living in military accommodation.

An Armed Forces mortgage adviser who understands military pay, postings, Service accommodation and the lenders that recognise these circumstances can make a real difference.

At PFL Mortgages, our Armed Forces advisers can help you explore your options, understand how your Service circumstances could affect your plans and work out when buying a home might be possible. We don’t charge Armed Forces members or their families a fee, and our support goes well beyond arranging a mortgage.

Still have a question? Ask our Armed Forces advisers at pflmortgages.com/ask.