Bath Building Society has updated its criteria for the ‘Rent a Room’ mortgage, allowing mortgages up to 100% of the purchase price.
This type of mortgage lets customers rent out a spare room and include the expected income in their mortgage affordability calculations.
Known as a lodger mortgage, this option enables earning up to £7,500 annually tex-free by renting a furnished room.
The society offers three 100% mortgage products with collateral security over a parent’s home up to 25%: a 2-year variable at 5.24%, a 5-year fixed at 5.59%, and a 2-year fixed at 5.64%.
Additionally, there are fixed and variable rate products at 85% loan-to-value.
Ben Hutchings (pictured), national account manager at Bath Building Society, said: “Our aim is to help first time buyers (FTB) to get onto the property ladder and our Rent a Room mortgage does just that.
“The average age of a FTB 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 FTB.”
