Student mortgages are a good way for parents to help their son or daughter take out a mortgage whilst they are studying at university. In order to qualify for a student mortgage, a guarantor must be available. The guarantor(s) can be a close family member or someone with a close long-term relationship to the applicant (minimum 3 years) who is willing to guarantee the full monthly mortgage repayments. To be accepted, the lender will look at the financial background and credit rating of the guarantor who must be able to prove they have enough disposable income, after paying their own outgoings (including their own residential mortgage) in order to afford the monthly repayments. The guarantor(s) can also provide the deposit or partly fund the deposit but it must be provided in the form of a gifted deposit whereby it is non-refundable at any time. In the case of parents providing the deposit, it enables them to pass on money to their children at an age at which they need it the most, hence their children will not have to pay inheritance tax (a parent will have to live for a minimum of 7 years after gifting the deposit to their children to ensure inheritance tax will not be payable).


In some cases the monthly mortgage payments can be cheaper than the average rent for student accommodation which makes this a very tempting consideration. Additional rooms can also be let out to fellow students to help cover the mortgage payments and in most cases, provide an excess monthly profit. If market conditions permit, the property may appreciate over the period of study

Student Mortgages

(usually 3-5 years) which can be sold at time of graduation. Ultimately, when the student commences work they can look at a full residential mortgage (subject to income) which will enable the parents to be removed as guarantors.


For students lets, a parent may also consider taking out a HMO Mortgage if tenant sizes are of 3 or more persons.


Advantages of student mortgages, using a guarantor:

  • Enabling a foot on the property ladder which would have otherwise not been possible
  • Providing a form of investment whilst covering accommodation costs

Disadvantages of student mortgages, using a guarantor:

  • The guarantor will be liable for the full mortgage costs
  • Financial or personal circumstances between each party may change over the term of the mortgage

Student mortgages are usually offered on similar rates and products as mainstream residential mortgage deals.


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The overall cost for comparison is 2.2% APR

The actual rate available depends upon your circumstances.

Ask for a personalised illustration. APR variable and based on a typical case

A FEE MAY BE CHARGED - AN AVERAGE FEE WOULD BE 2.7%