What if you find your ideal home, but your income isn’t quite enough to get the mortgage you need? If the property has a spare bedroom, our Rent A Room mortgage might be the answer you’re looking for. 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 needs a loan of £160,000 but is struggling to find a lender that will lend this amount due to their income not being high enough. The applicant has a friend who is looking for somewhere to live and is interested in renting the second bedroom, but they do not wish to commit to purchasing a property together. The friend is happy to pay £400 per month to rent the spare bedroom. Bath Building Society would consider this rental income, which would cover about £48,000 of the loan. The remaining £112,000 will be covered by the applicant’s income.
The mortgages listed below move on to our Standard Variable Rate, 5.60% (variable), after the initial rate period. Our SVR is increasing to 5.75% (variable) from 1st July 2022.
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.