Did you know, Bath Building Society offers mortgages up to 85% of the purchase price where you can rent a spare room and have the expected income count towards your mortgage affordability calculations? This is sometimes referred to as a lodger mortgage, or lodger income mortgage.
The extra income from renting out a room in your new house could provide the affordability calculations boost you need to get onto the property ladder. And you can earn up to a threshold of £7,500 a year, tax free, from letting out a furnished room in your home.
Use our affordability calculator to get an idea of how much you could borrow. This unique calculator allows you to add expected lodger income to the calculation (in the Applicant details section) and will work out the maximum amount you could borrow, assuming the rental income received would cover at least 50% of the mortgage. Please contact the team if you have questions about your specific circumstances.
Mortgages are secured against your home. You could lose your home if you do not keep up payments on your mortgage.
Please scroll down for monthly payments by product.
This is the maximum amount based on the information you provided. Your mortgage adviser will take you through the application process and will calculate the amount you can afford to borrow based on your income after the deduction of those expenses and commitments. Further restrictions may apply for specialist products.
Variable mortgages
Our Standard Variable Rate (SVR) is currently 7.99% variable. 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.
Representative example: A mortgage of £230,000.00 taken out for a period of 35 years on a repayment basis.
Monthly instalments: £1,209.55 per month for 23 months, followed by £1,465.82 per month for 36 months, and finally £1,616.68 per month for 360 months.
Total amount payable: £664,062.97
Total amount of credit: £230,000.00
The total amount payable includes a valuation fee of £370.00 , a product fee of £999.00 and a closing fee of £100.
The overall cost for comparison is 7.7% representative APRC.
This example is based on our Rent a Room , 2 year discount mortgage. It is based on our current Standard Variable Rate of 7.99% with no fees added to the mortgage.
Please ask for a personalised illustration for your own particular requirements.
If you repay your mortgage early, or make an overpayment, you may have to pay an early repayment charge.
For full repayment of a 5 year fixed product, you will pay 3% of the outstanding balance in years 1, 2, 3 & 4; 2% in year 5, plus a Closing Administration Fee (currently £100).
For overpayments of a 5 year fixed product, you will pay 3% on any amount exceeding your 20% limit in year 1, 2, 3 & 4, 2% in year 5.
For full repayment of a 2 year fixed or discounted product, you will pay 3% of the outstanding balance in the first year and 2% in the second year, plus a Closing Administration Fee (currently £100).
For overpayments of a 2 year fixed or discounted product, you will pay 3% on any amount exceeding your 20% limit in the first year and 2% in the second year.
Size: Minimum £50,000, Maximum £300,000.
Term: Minimum 5 years, Maximum 40 years.
Property:
Minimum Value: £100,000. Must be in England, Wales or Scotland.
The property must be fit for purpose and suitable for immediate occupancy.
Location:
Must be in England, Wales or Mainland Scotland, Shetland, Orkney, Arran, Bute, Skye, Harris & Lewis, Mull and Islay. We are unable to offer a Right To Buy mortgage in Scotland.
All applicants:
Must be a UK resident. Minimum age 18. No maximum age, subject to income in retirement.
Income:
Minimum income of at least £20,000 p.a. after deductions (excluding rental income), employed or self employed.
No minimum period of employment, but must have passed probation, or have 3 years self-employment history.
The amount we will lend will depend on the value of the property and a calculation based on earned income, rental income and expenditure. As a guide, we will take gross annual income (not including rental income) and then apply a deduction for the annual amount paid towards any existing debts or other financial commitments. We apply a multiplier of up to 4x and apply a rental coverage assessment from letting a room in the property to cover up to an additional 4x income. Only one tenant can be assessed and the expected rental income will be based on an independent assessment.
These multiples are for guidance only and do not guarantee that we will lend the amount indicated. We will carry out a full assessment of your income and expenditure to ensure that you can afford your mortgage both now and in the future.
Underwriting:
We take a flexible approach to underwriting and will consider each case on its merits. We do not credit score. The actual rate and APRC for your case will depend on your circumstances and our assessment of the risk. There needs to be a formal agreement with the tenant letting the room in the property.
An estimated value of your property or the property you are purchasing.
An amount you wish to borrow.
The amount of mortgage expressed as a percentage of the value or purchase price of the property.
The number of years it will take to pay off this mortgage (minimum 5 years, maximum 40 years).
This is a repayment only mortgage. The range is dependent on the product category or chosen product.
This is the rate you pay during the discount period. Two year residential products receive a 1% discount from the Standard Variable Rate (SVR) for three years when the initial rate period comes to an end. All other products revert to the SVR after the initial rate period.
This is the % discount from the SVR during the discount period.
The interest rate paid on the amount you have borrowed together with any other charges associated with the mortgage (e.g. arrangement fees) and then expressed as an annual percentage rate of charge. The APRC helps you compare the true cost of borrowing, for example across different mortgages and lenders.
The amount of mortgage expressed as a percentage of the value or purchase price of the property.
A fee to cover the cost of providing your mortgage. This fee is usually paid on completion of your mortgage.
This is the rate you pay during the discount period. Two year residential products receive a 1% discount from the Standard Variable Rate (SVR) for three years when the initial rate period comes to an end. All other products revert to the SVR after the initial rate period.
This is the % discount from the SVR during the discount period.
The interest rate paid on the amount you have borrowed together with any other charges associated with the mortgage (e.g. arrangement fees) and then expressed as an annual percentage rate of charge. The APRC helps you compare the true cost of borrowing, for example across different mortgages and lenders.
The amount of mortgage expressed as a percentage of the value or purchase price of the property.
A fee to cover the cost of providing your mortgage. This fee is usually paid on completion of your mortgage.
This is the rate you pay during the discount period. Two year residential products receive a 1% discount from the Standard Variable Rate (SVR) for three years when the initial rate period comes to an end. All other products revert to the SVR after the initial rate period.
The interest rate paid on the amount you have borrowed together with any other charges associated with the mortgage (e.g. arrangement fees) and then expressed as an annual percentage rate of charge. The APRC helps you compare the true cost of borrowing, for example across different mortgages and lenders.
The amount of mortgage expressed as a percentage of the value or purchase price of the property.
A fee to cover the cost of providing your mortgage. This fee is usually paid on completion of your mortgage.
This is the rate you pay during the discount period. Two year residential products receive a 1% discount from the Standard Variable Rate (SVR) for three years when the initial rate period comes to an end. All other products revert to the SVR after the initial rate period.
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This is the rate you pay during the discount period. Two year residential products receive a 1% discount from the Standard Variable Rate (SVR) for three years when the initial rate period comes to an end. All other products revert to the SVR after the initial rate period.
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