You are here: Home - News -

Bath Building Society launches Rent a Room mortgages

  • 19/02/2016
  • 0
Bath Building Society launches Rent a Room mortgages
Bath Building Society has launched a Rent a Room mortgage, allowing buyers to stretch affordability by putting the rent toward mortgage payments.

The society gave the example of a single, childless applicant earning £26,000 who wants to buy a two bedroom property for £200,000. With a 20% deposit, they would require a £160,000 loan.

By letting the spare bedroom out at £400 a month, the rent would cover £58,500 of the loan, allowing the buyer to instead borrow £101,500 over 25 years.  Up to 50% of the loan amount can be covered by the rental income.

The mortgages are available at the same rates and terms as the society’s standard residential mortgages and its 95% parent assisted mortgages, starting at 2.99% for a three-year variable. The maximum loan-to-values offered are up to 85%, or up to 95% with collateral.

Dick Jenkins, chief executive of Bath Building Society, said: “Increasingly people are starting to realise that rent is more expensive than having a mortgage in the current climate.

Many young people are happy with sharing their home with a friend and here we have created an opportunity to use the rent of a friend sharing the property to contribute to the affordability of the mortgage. Better still, some can use this arrangement to qualify for tax relief from the government,” he said.

There are 0 Comment(s)

You may also be interested in

  • RT @VickyHartleyMS: Sunak doubles incentives to £3,000 to take on apprentices and offers £126m in 'new cash' to triple traineeships. One to…
  • RT @VickyHartleyMS: Watch out for breaking news coverage on the #Budget2021 this afternoon from the best UK mortgage and property journalis…

Read previous post:
A man hands over some keys
Landlords’ returns rise to £22,000 in a year

Landlords have seen total returns from buy-to-let properties rise to the highest levels since November 2014, according to Your Move...