Rent a Room Mortgage


Our Rent a Room Mortgage allows an individual applicant to borrow more by renting out a room and using the rent towards the mortgage payment.

What if you find your ideal home, but your income isn’t quite enough to get the mortgage you need? Well, if the property has a spare bedroom, our Rent a Room Mortgage might be just the answer.  If you rent out a spare bedroom, we will take into account the rental when deciding whether we can offer you the mortgage you need.

Product Name

The overall cost for
comparison is:

Rate structure based on our Standard
Variable Rate

Availability

Flexibility

Fees

Early Repayment Charges

3 year Residential
2.45% Discount

RDD051

4.7% APRC

2.59% variable for 3 years followed by Standard Variable
Rate (SVR), currently
5.04%

Purchase up to 80% Loan To Value (LTV). Minimum deposit of 20% required.
 

Overpayments up to 20% of the capital balance as at 1st January are allowed in each calendar year without penalty.
Portable.

  • Product Fee 0.4% of  advance (Minimum £599)

  • Administration Fee £125

  • Valuation Fee (scale)

  • Completion Fee £75.

3 % in years 1 & 2, 2% in year 3, plus a Closing Administration Fee (currently £100).

An example: A mortgage of £173,000 taken out for a period of 32 years on a repayment basis.

Monthly instalments: £664.29 per month for 35 months, followed by £890.16 per month for 348 months

Total amount payable, including fees: £334,432.83.

Total amount of credit: £173,000.

The total amount payable includes product fee £692, valuation fee £265, administration fee £125, closing fee £100 and completion fee £75.

The example relates to Product Code RDD051, is based on a typical mortgage and assumes that fees are not added to the mortgage. Please ask for a personalised illustration for your own particular requirements.

 

Some important notes

•Single applicants only

•Rental income from only one tenant will be taken into account and the expected rental will be based on an independent assessment.

•Minimum income of £20,000pa (excluding the rental income), employed or self-employed.

•Up to 50% of the loan amount can be covered by the rental income from letting a room in the property. The balance of the loan must be covered by income.

•The amount being covered by the rent must be no more than 4 x the borrower’s income.

•The property must be fit for purpose – for example, it must have at least two bedrooms and be suitable for occupancy immediately on completion of the mortgage.

• There needs to be a formal agreement with the tenant.

•We recommend that the borrower take tax advice.

•Maximum Loan to Value is up to 80%.

If you would like to know more about our Rent a Room Mortgage, or any other aspect of our lending policy, please contact our sales team on 01225 475737 or at mortgagesales@bibs.co.uk