Head of Content
Mortgage Advisor & Director
Can I get a mortgage if I have a lodger?
You are unlikely to have a problem with getting a mortgage if you have a lodger.
In contrast to a tenant, with a lodger, you also live in the property. While you may not have to worry about your mortgage, there are other considerations if you're looking to get a lodger.
At Teito, our team of experts are experienced in helping people in all sorts of situations to find their perfect mortgage. If you're looking to take on a lodger for your new property, get started today and we'll find you the best deal possible.
Will I need a buy to let mortgage with a lodger?
No, as you are continuing to live at the property alongside the lodger, you will not need a buy to let mortgage.
Buy to let mortgages are required when you're renting out the entire property, with the rental income being used to cover the mortgage repayments. If you have an existing residential mortgage and are looking to rent out your property, you can apply to your lender for a consent to let on your mortgage, rather than getting a new buy to let mortgage.
Can I apply for a mortgage with lodger income?
With the right lender and lodger agreement, you may be able to include the lodger income in your mortgage application.
The impact of having this additional income means your affordability will improve in the eyes of the lender, potentially allowing you to borrow more on the mortgage.
As a whole of market broker, we work with specialist lenders, including those who accept non-standard income into their affordability calculation. Get started now to explore your options!
Can I have a lodger with the rent a room scheme?
With the government rent a room scheme, you can make up to £7,500 per lodger, per year, without having to pay tax or declare the additional income. If you're considering a lodger, you need to be aware that the current ceiling under the rent a room scheme is £144 a week. If the weekly rental income exceeds this threshold, then you'll need to register for self-assessment and declare the income to HMRC.
We would recommend discussing your options with an accountant before getting started on your mortgage application.
Can I get a lodger with a leasehold property?
If your property is leasehold, you may find that it forbids any form of sub-let; including a lodger. While your mortgage provider may not have any issue with you taking on one or more lodgers, you may need to check the leasehold agreement to confirm the new situation is acceptable.
What home insurance will I need with a lodger?
As with any mortgage, you'll need to secure adequate buildings insurance.
If you have a lodger living with you at your property, you may find that this is outside of your insurance policy and therefore invalidates the cover. It is essential that you understand the terms and conditions of your insurance and check if lodgers are covered. Our team can advise on insurance if you're considering a lodger.
Will having a lodger affect my credit rating?
Despite popular opinion, your credit score is not related to who lives with you.
If your lodger has a low credit rating, this will not affect your own credit rating or your ability to get a mortgage. Be mindful that if your lodger is not good with managing their finances, you may be left to foot the bill of unpaid rent and household bills.
Apply for a lodger mortgage now
It may not be straightforward to find a mortgage provider who will take into account lodger income. At Teito, we are an independent whole-of-market broker, meaning we have access to deals that are not generally available to the public. Start comparing deals online now, and find your perfect lodger mortgage.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
