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.
This example explains how it works:
An applicant earns £28,000pa and wants to buy a two bedroom property for £200,000. The applicant has a 20% deposit, so need a loan of £160,000 but is struggling to find a lender to go to that loan amount because they only earn £28,000pa income. The applicant has a friend who is looking for somewhere to live and is interested in renting the second bedroom; they do not want to buy a property together as they do not want the long-term commitment. The friend is happy to pay £400 per month to rent the spare bedroom. The applicant would now contact Bath Building Society who calculate the rent would cover about £48,000 of the loan and the remaining £112,000 will be covered by the other income.
The mortgage listed below moves on to our Standard Variable Rate, currently 4.9% (variable), after the initial rate period. There may be a limit on how low your interest rate can fall. This is called an ‘interest rate floor’. The interest rate floor applicable to your loan will be specified in your loan documentation.