University Mortgages for Students

Buying a home as a university student might sound impossible, but a small number of students in the UK are doing just that with family support.

There are about 2.9 million students enrolled in UK higher education in 2024​, and many face surging housing costs. 

In fact, student rents in many university cities jumped by roughly 12% between 2022 and 2024​.

In London, the average student accommodation now costs ~£13,600 per year​, higher than the maximum yearly maintenance loan (~£13,348) students can receive for living costs​.

It’s no surprise that most new students are now considering living at home to save money​.

At the same time, the average first-time buyer in the UK is around 33 years old and needs a £61,000 deposit upfront​ – a hurdle far beyond most students. 

Given these challenges, some students and their families turn toward getting university mortgages for students, as a way to fund a place to live during university instead of renting.

Can a Student Get a Mortgage?

Yes, you can get a student mortgage, but only with help. Generally, student mortgages (university mortgages) are rare and require significant family support. 

Lenders will want assurance that the loan will be repaid, yet most students have little or no full-time income to show. This means a student usually cannot get a mortgage on their own in the traditional way.

However, some lenders consider students if a parent or close family member is willing to back the mortgage. 

This support can take different forms, such as acting as a guarantor (agreeing to cover payments if the student can’t) or even joining the mortgage application. 

Essentially, the bank needs to see that someone with financial stability stands behind the student. 

With that kind of backing, a student can get a mortgage through specific programs informally called Buy for Uni mortgages or simply student mortgages designed for this scenario.

University Mortgages for Students (Buy for Uni Mortgages)

Buy for Uni is a nickname for a type of student mortgage scheme that lets a student buy a property to live in while at university, usually without a deposit, by using their family’s financial support as security. 

It’s an option aimed at students who would otherwise be renting. Instead of paying rent to a landlord, the student becomes a young homeowner (often with roommates paying rent to them).

As of today, only a few lenders offer this specialised product in the UK (mostly smaller building societies)​ and it’s typically available for students studying in England or Wales.

How Does Buy for Uni Mortgages Work?

Here’s how a Buy-for-Uni mortgage generally works and who it’s for:

No Deposit Needed (100% LTV Mortgage)

Unlike a normal mortgage, where you’d need a deposit (often 5-15% or more), a Buy-for-Uni mortgage can finance up to 100% of the property price. The trick is that the lender will require a guarantee or collateral from the student’s family.

For example, parents might offer their own home or savings as security, and the bank could take a legal charge on the parents’ house or hold a sum in a locked account as a guarantee. 

This protects the lender in case the student can’t pay.

In one real example, a student borrowed £120,000 with no deposit, secured by a £30,000 charge on the parents’ home​​ (source)

Student as Owner and Borrower

The property is purchased in the student’s name, and the mortgage is also in the student’s name, but with family backing. The parents (or guarantor) do not appear on the title deeds, so the student is the sole owner.

The lender still requires the family’s financial guarantee, but legally, the home belongs to the student.

Who Is Eligible for Student Mortgages?

Usually, these mortgages are for students aged 18+ in full-time higher education who have a parent (or close relative) willing and able to support the application. It particularly suits students whose families have substantial home equity or savings.

It’s often viewed as an alternative for well-off families who might otherwise buy an investment property or pay rent for their child. The student should plan to live in the property as their main residence while studying.

In many cases, the property will have extra bedrooms so the student can rent out rooms to friends or other students for income. In fact, lenders expect that rent from one or two lodgers will help cover the mortgage payments.

Property Criteria

The house or flat being bought usually must meet certain criteria set by the lender. You’re not limited to “student accommodation” blocks or new builds; you can buy a normal flat or house on the open market.

However, location and type of property may be restricted. For instance, some lenders require that the home be within a certain distance (e.g., 10 miles) of the university campus and that it has enough bedrooms for additional tenants​.

The idea is to ensure the property is practical for student life and can generate rental income. A very small studio flat or a house too far from the university might not qualify. 

Note: Some lenders also exclude ex-council or ex-local authority properties, or other “non-standard” constructions, due to resale and valuation concerns.

How Do Repayments Work?

Despite the unusual setup, the mortgage functions like any other home loan. The student (with help from parents or from tenant rent) will need to make monthly mortgage payments.

Some Buy-for-Uni deals may offer an interest-only repayment option during the study period – this keeps monthly payments lower (since you’re only paying interest and not paying down the loan balance initially). An interest-only payment can often be covered by renting out spare rooms. 

For example, a £120,000 interest-only loan might cost around £500 per month in interest​, which two student housemates each paying rent could feasibly cover. 

Alternatively, mortgages can be made on a repayment basis, but the student or family must ensure affordable payments. 

In all cases, if the student struggles to pay, the responsibility falls to the guarantor or supporting family to step in and cover the mortgage – this is the key condition that makes the arrangement possible.

What Happens to University Mortgages After Graduation?

What happens when university is over?

Typically, the student (now a graduate) will have a few options. They could sell the property and use the proceeds to repay the mortgage. 

Alternatively, if they want to keep the property, they would need to remortgage, possibly switching to a standard residential or buy-to-let mortgage in their own name once they have income, or continue with a guarantor mortgage until they can solo qualify.

The goal is often to eventually take the parents off the hook by refinancing once the graduate’s income is sufficient or some equity has built up. Each lender has its own rules on the timeline for this.

Alternative Mortgage Options for Students

Buy-for-Uni mortgages are the headline option for students, but they are not the only route. If you’re a student (or the parent of a student) looking to buy a property, there are a few alternative mortgage structures that might work. 

These also involve family assistance and are available from more lenders. The main alternatives are guarantor mortgages and joint borrower, as well as sole proprietor arrangements.

Guarantor Mortgages

A guarantor mortgage is a traditional way for a person with low income (like a student) to get a home loan by having someone else (the guarantor) promise to cover the debt if they cannot. 

In practice, it is quite similar to the Buy-for-Uni concept, but it might not always be a full 100% loan and can be used outside of strictly student-specific deals.

In reality there are very few guarantor mortgages remaining in the marketplace. 

Joint Borrower, Sole Proprietor (JBSP)

Another route is a Joint Borrower, Sole Proprietor mortgage (often abbreviated to JBSP). 

This arrangement is increasingly popular for young buyers who need a boost in affordability. It allows a parent (or sometimes another relative) to jointly take out the mortgage with the student, without being a co-owner of the property.

Because it’s essentially a standard mortgage with two borrowers, you’ll find interest rates similar to normal first-time buyer mortgages.

Conclusion

Getting a mortgage as a student is possible, but only with strong family support. 

The Buy for Uni mortgage scheme shows that some students are effectively becoming owner-occupiers and landlords during their degrees. For those who can make it work, it can be a way to avoid wasting money on rent and even turn a profit on a property.

That said, these are specialist products with long-term commitments. To understand what’s best for you, it’s a good idea to speak with a mortgage advisor. 

Connect with the mortgage advisors we work with, and they can help you compare options, explain the risks, and guide you through the process with lenders who support student mortgages.