The Rent a Room mortgage offers up to 100% of the purchase price where a customer can rent a spare room.
The expected income can be used in its mortgage affordability calculations as part of the Rent a Room mortgage. This can also be known as a lodger mortgage or lodger income mortgage.
The deal works with a collateral security over the parent’s home of up to 25% and has a trio of products at 100%.
This includes a two-year variable deal at 5.24%, a five-year fixed rate at 5.59% and two-year fixed rate at 5.64%.
There are also two fixed rate deals at 85% loan to value (LTV) and a variable deal at 85% LTV.
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Customers can earn up to a threshold of £7,5000 per year tax-free from letting out a furnished room in their home.
Ben Hutchings, national account manager at Bath Building Society, said: “Our aim is to help first-time buyers to get onto the property ladder and our Rent a Room mortgage does just that. The average age of a first-time buyer is 34, and with mortgage products like these, we hope to make the market an easier place for people to realise their dreams of owning their own home and decrease the average age of a first-time buyer.”
