Buy for uni – encouraging students to become landlords

 

More students will have the opportunity to study and invest in property while at uni, as Loughborough Building Society launches buy for university mortgages to mortgage advisers.

Ashley Pearson, business development manager at Loughborough Building Society, said: “Buy for Uni mortgages have been offered via our direct channel for over two years with great success. I’m really pleased that this product is now available to our panel of directly authorised (DA) intermediaries.

“We’re keen to offer mortgage solutions to borrowers with a range of different circumstances, and this is an excellent opportunity for those who in most cases, have never dreamed that they could buy their own home as a student.”

A Buy for Uni mortgage helps students get on the property ladder and financially invest in their future, while studying for their chosen career. Savvy students can choose to become a landlord and get themselves on the property ladder rather than ‘throw away’ money paying to rent accommodation.

A guarantor is essential

Students who want to buy a property and rent out rooms in their home to friends or fellow students can apply as long as they have a payment guarantee. The rent earned from the rooms they let is used to cover the mortgage repayments, and there is also the potential to top slice from a guarantor’s income.

Applicants must have at least one year left at a university in England or Wales and intend to live in the property they purchase themselves. The property must also be within a 10-mile radius of their university location, and they can let up to two further rooms to paying tenants.

The Buy for Uni mortgages available through intermediaries are available at a maximum 80% loan to value. Variable rates for both three and five years are available at 4.59% with no early repayment charge and a £999 completion fee on an interest-only or repayment basis.

On graduation, students can sell or convert their mortgage

On completion of their university course, borrowers can choose to sell or carry on living in the property after an affordability assessment to convert to a residential mortgage. Alternatively, they could also consider changing the loan to a traditional buy-to-let.

Bath Building Society has been offering Buy for Uni mortgages for the past decade, and Loughborough is only the second lender to provide this opportunity to students, initially direct to customers and now also available through affiliated mortgage brokers.

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Buy for uni – encouraging students to become landlords

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