Check eligibility for a buy-for-uni mortgage
- Free online mortgage broker
- Mortgage in principle in 15 mins
- Low interest rates
- Free expert advice
Buy-for-university mortgages are a product which will help you get on the property market while you’re still studying.
This is an interest-only mortgage aimed specifically at university students. It allows them up to borrow up to 100% of the property value to purchase a home to live in throughout their studies. They will be permitted to rent out rooms in this property to tenants.
To be approved for this mortgage, the student’s parents must act a guarantor, providing security in the form of cash or equity from the property they own.
After the student graduates, they must either sell the property or switch to a traditional mortgage.
There are plenty of mortgage lenders that will consider granting a mortgage to a student.
However, the decision to approve your mortgage application will be primarily based on your annual income, the size of your deposit and your credit score. Most students are severely lacking in these areas.
Thankfully, some mortgage providers will still consider lending to students if they are able to provide a guarantor.
With a buy-for university mortgage, students will only have to pay the interest on their mortgage during their studies. In many cases, they will be able to fund these payments by letting out the additional bedrooms in the property. Plus, you’ll provide the lender the additional safety net of a guarantor.
That’s why it may be easier to be approved for a buy-for-university mortgage, compared to other more traditional mortgages.
If you don’t have a large deposit or a stable income, you’ll most likely have to use a guarantor to stand any chance of being approved for a mortgage.
In most cases, the guarantor will have to be a legal guardian or a direct family member. On top of that, they’ll need to be a UK resident and a property owner. Some lenders also place maximum age and minimum income limits on guarantors.
If parents opt to buy a property and rent it out to their children, they may be able to secure a better interest rate than those available with buy-for-university mortgages. There will also be no need to sell or remortgage the property after their child graduates.
However, when renting properties out to family members, they’ll have to opt for a regulated buy-to-let mortgage. As the name implies, these loans are regulated by the FCA and tend to require larger deposits than traditional buy-to-let mortgages.
Parents will face a larger stamp duty bill when buying an additional property, compared to what their children would pay (assuming it’s their first property). They may also face extra capital gains tax or inheritance tax bills as a result of buying this property.
Finally, when parents buy the property, it is them (not their child) who will face the obligations of being a landlord.
Buying a bed on a budget just got a whole lot easier, though without the sleep trial you might expect.
Axie Infinity is an RPG game that is currently dominating the NFT sector. Discover what Axies are, what makes them unique and how you can earn money simply by playing.
How do Klarna and Laybuy compare? We put two of the UK’s most popular buy now, pay later services head to head to see how they match up and which might be the right choice for you.
See if you can get your next Secret Sales order for less with our hand-tested voucher and promo codes.
Find out the difference between a credit score and a credit report, plus the factors that can push your score up and down.
What you need to know about getting a mortgage if you’re buying or refinancing a farm or farmland, including the factors lenders consider when you apply for one.
Everything you need to know about taking out a mortgage to buy or refinance a pub. Find out where to get one, how to get the best deal and the factors lenders consider.
In-depth guide to taking out a commercial mortgage to buy or refinance a hotel. Find out how to get the best rates, factors lenders consider and what you need to apply.
Find out if a bridging loan or commercial mortgage would suit you if you’re buying or refinancing commercial property and when a bridging loan can be a better option.
Find out how much deposit you need if you’re taking out a commercial mortgage, including the factors lenders take into account, and how to get the best deal for you.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.