Can students get mortgages?
Students who want to avoid spending their university years in a neglected bedsit can explore options for getting a mortgage while studying.
Student accommodation can be expensive and often doesn't feel like home. Between rising rents in cities like London, Manchester, Birmingham and Leeds, and the challenge of finding quality housing, many students and their families are exploring alternative options.
The cost of student accommodation has also been rising significantly. Popular student cities like London, Manchester, Birmingham and Leeds are seeing soaring demand for accommodation, pushing rents up higher.
However, students don't need to spend their university years in a neglected bedsit, handing over most of their student loan to a landlord. They could become homeowners or even landlords themselves.
The following sections explain how students could get a mortgage.
Key takeaways
- Students could get a mortgage with parental support through either a standard residential mortgage with an Income Boost or a Buy-for-Uni mortgage
- With an Income Boost, parents join as joint borrowers but aren't added to the property deeds, so the student remains the sole owner
- Buy-for-Uni mortgages allow students to borrow up to 100% of the purchase price and rent out spare rooms while living in the property
- Student loan repayments can impact mortgage affordability, but some lenders may accept student maintenance as income
- Parents could also buy a property for their child, though this comes with additional stamp duty and potential Capital Gains Tax implications
Explore student mortgage options with Tembo
We could help students and their families get on the property ladder while studying, with specialist advice. Discover what options are available to you with advice tailored to your circumstances.
Can a student get a mortgage?
Yes, you could get a mortgage as a student. The two routes to getting a mortgage while at university both involve having your parents or guardian join you on the mortgage as a guarantor to boost their affordability.
Standard residential mortgage
As long as you have no plans to rent out the property, you could apply for a standard residential home loan with any lender that offers what's known as a joint borrower, sole proprietor mortgage. At Tembo, we call this an Income Boost, and it's one of the ways we help customers increase their borrowing potential.
That means your parents will join the mortgage application as joint borrowers with you, but they won't be added to your property deeds, so you remain the sole owner. With their incomes added to yours, you could increase what you can borrow for a mortgage.
When family members are added to the mortgage, it means the student and family are individually and jointly responsible for making the monthly repayments and for repaying the mortgage in full. So if you cannot make the mortgage repayments, your loved ones will be legally required to step in.
You will need a deposit of at least 5% (depending on the lender), and you must be over 18. You'll also need to pass the lender's affordability checks to be approved for the mortgage, as will your parents. This is to ensure you can afford the loan, even if interest rates were to rise. Any money you make from part-time jobs may be accepted, along with student maintenance.
Related reading: Who offers guarantor mortgage schemes in 2025?
See what you could afford with an Income Boost
See your mortgage options with your parents to see if you're eligible for an Income Boost, and how much you could afford with their support.
Buy for Uni mortgage
By using a student mortgage, also known as a Buy-for-Uni mortgage, you could rent out the spare rooms in your house to put towards the monthly repayment as long as you live there too.
Student mortgages are only offered by a handful of small building societies, including Vernon Building Society and Bath Building Society.
You could borrow up to 100% of the purchase price, which means you don't always need to put down a deposit.
If you need to borrow more than 80%, your family members must provide either a cash deposit equal to the amount being lent above 80%, or they must allow the lender to put a legal charge on their property for a fixed sum. This differs in value depending on which lender you choose.
A legal charge is like a mortgage in that it means that the lender can force you to sell your property so that they can take back what you owe them.
Example: You want to buy a property for £200,000. You don’t have any deposit, but your parents have savings. Your parents must deposit cash equal to 20% of the purchase price. They hand over £40,000 to the building society to be kept in a savings account.
If your parents don't have spare savings, they agree to a legal charge on their own home for a fixed sum of at least £40,000. Some building societies ask for more.
Restrictions apply to the type of property you could buy; for example flats are often not allowed, and houses cannot have more than four bedrooms and three tenants.
You must live in the house, be in higher education and have at least one more year left on your course. Some lenders insist that the house is close to the university, and you'll need excellent credit history.
When do my parents get their money back?
If you use a student mortgage, your parents' money is held in an interest-bearing savings account by the building society. It cannot be withdrawn until either the value of the mortgage falls below 80% of the purchase price or the mortgage is paid back when the property is sold or converted to a standard residential or buy-to-let deal once you've graduated. The same principles apply if your parents have chosen to secure a legal charge on their property.
With an Income Boost, no cash changes hands, but your parents will remain on the mortgage (and therefore liable to support repayments) until it's affordable on your salary alone, for example, when you start earning after university. However, please remember that being added as a joint borrower could impact your parents’ ability to get credit in the future
Does my student loan count as income?
Lenders offering student mortgages may accept some or all of your student loans as income to support the mortgage application.
If you choose to use a standard mortgage, rather than a Buy-for-Uni deal, the lender may factor your future student loan repayments into its affordability assessment, which could lower the amount you could borrow.
Can you get a mortgage if you have student loans?
Yes, you could. However, your loan repayments will impact your ability to buy a house. Your student loan repayments are automatically deducted from your wages, which means your monthly take-home pay will be less. This could impact your affordability as you have less coming in each month. Mortgage lenders need to ensure you can afford the mortgage repayments on your current income, once all your expenses have been considered, before approving you for a mortgage.
Why buy a home as a student?
Benefits
You could get on the property ladder sooner than your peers. Buying sooner rather than later means you could start to benefit from house price growth sooner, as well as building up equity in your own home each month.
Instead of paying rent to your landlord, you're investing in your own property instead.
Benefit from a higher quality of accommodation that you can decorate and furnish yourself.
Risks
By taking out a 100% mortgage, there is a risk of ending up with negative equity if house prices fall, meaning the balance of your mortgage is more than the value of your home.
Your guarantor's home or savings are at risk if the mortgage payments are not made on time.
Buy-for-Uni mortgages have more expensive interest rates because the lender is taking on a bigger risk by offering a 100% mortgage.
Can I buy a house for my child?
Yes, parents could buy a house for their child using a standard mortgage. This could work out cheaper than paying rent each month on their behalf. However, buying a second home usually comes with more expensive tax implications. For example, parents will have to pay an additional 3% stamp duty on top of the standard rate if they already own a home.
The property could be transferred into the child's name in the future when they can afford to support the mortgage. But you may be liable for Capital Gains Tax (CGT), so it's wise to take tax advice first.
If you sell the property because your child does not want to live in the area after graduation or wants to move out, you might also incur a CGT tax bill.
You could set up an informal agreement with your child for them to pay rent, which would help ease the cost burden on you. However, a mortgage lender is not likely to allow you to rely on this income. Lenders understand that parents are unlikely to enforce rent payments strictly with their own children, which is why this income typically won't be considered in affordability assessments.
If you want to help your child get on the ladder, there are ways parents could help their children buy without buying them a house. To see how you could help your child get on the ladder, get your mortgage options with Tembo today. It takes 10 minutes to complete, and there's no credit check involved. At the end, you'll get a personalised mortgage recommendation of all the ways you could help boost your child's mortgage affordability.
Looking for a student mortgage? We can help!
Get your personalised mortgage options today with Tembo to discover all the ways you could get on the ladder sooner, even as a student. You can then book a free, no-obligation call with one of our award-winning team members to chat through your options.
