Everything You Need to Know About Getting a Student Mortgage

A student mortgage will enable you to finance the purchase of your home, meaning no more wasted money paying rent. You will also own your first piece of major collateral, so a loan in the future may be easier to secure. However, if you do not keep up the regular repayments on your mortgage, the bank will repossess your home from you. It is for this reason; you should consider your financial situation before committing to a student mortgage.

Most financial institutions require borrowers to place at least 20% of the property's value down as a deposit. This varies between lenders and can be as much as a 40% deposit if your credit history is questionable. When deciding how much you can borrow on your student mortgage, most lenders will double or triple your annual income. Again, this is subject to status and any other financial commitments you may have.

High-street bank Barclays recommends a person wishing to apply for a student mortgage or indeed any mortgage, should arrange a meeting with one of their dedicated mortgage advisors. They will discuss important factors your mortgage may have, such as the ability to overpay when you can afford too or to underpay when you hit financial problems. With Barclays a student whose annual income is £25,000, can borrow up to £75,000 on their mortgage.

Santander offers a variety of attractive mortgage packages suitable for a student. With the option of two or three year fixed rates, their average interest rate is 4.25% APR. You can also get a student mortgage where you pay no valuation fee and you receive £250 back as a welcome bonus.

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