100% Mortgages for Students
Building society offers mortgages of up to £250k to students
15th March 2006
A building society has announced a new package aimed at turning students into landlords by offering them a 100% mortgage of up to £250,000.
The scheme, launched by Bath Building Society, is believed to be the first of its kind in the UK, and is based on the idea of a student taking out the mortgage and then renting out roooms in the house to other students to cover the repayments, which would be at a discounted rate while still at university.
The student would need the support of parents who would back the loan using their own home's equity.
Restricted at first to students in Bath and Bristol, the product could be expanded to other university towns if successful.
A spokesman for the building society said that students would benefit from a better quality of housing, and that local residents would also benefit as students would probably look after their own property more carefully than that they are renting from an absent landlord.
It remains to be seen, however, how popular the scheme will be with students who are already racking up large debts during their studies, and may baulk at the idea of also taking on a large mortgage.
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