Mortgage with lodger or rent-a-room income
Why most lenders ignore lodger income
If you already have a lodger
If a lodger is already living with you and you have a track record of regular rental income, we may be able to include that in your affordability assessment.
We’ll typically want to see 6 to 12 months of bank statements showing the income coming in, along with a signed lodger tenancy agreement. Depending on the amount received, we may also ask for your Self-Assessment tax return or SA302.
Common scenarios we can help with
Remortgaging where lodger income makes repayments more comfortable
Mortgage application where your main income has recently changed and lodger income bridges the gap
How we assess rent-a-room income
We need to see that the income is real and regular. That means bank statements covering 6 to 12 months showing rental payments received, and a signed tenancy agreement with your current lodger.
If the rental income is above the £7,500 tax-free threshold under the government’s Rent a Room scheme, we may also ask for your SA302.
A real person reviews your case and makes the decision.
How we could help
Human decisions
Rent-a-room income counted
Borrow up to £450,000
No arrangement fees
How it works
Tell us about your property and lodger plans
Decision in principle
Full application
Completion
Why choose London Mutual?
Member-owned – a financial co-operative run for the benefit of our 42,397 members, not for profit.
Community roots – serving communities in South London and beyond for over 40 years.
Workplace partnerships – saving and borrowing direct from pay with the NHS, armed forces and public sector.
Safe & regulated – Authorised by the FCA, with members’ savings protected up to £120,000.
Next steps
Book a call with a mortgage advisor
Get a decision in principle
Mortgage FAQs for rent-a-room income
Can lodger income count toward my mortgage affordability?
Yes, in some cases. We can consider lodger income where there is already a lodger in place, a signed tenancy agreement, and a clear track record of regular rental income — typically evidenced by 6 to 12 months of bank statements.
How much lodger income can you take into account?
There’s no fixed cap, but we’ll base our assessment on what’s evidenced in your bank statements. The government’s Rent a Room scheme allows up to £7,500 a year tax-free — we’ll typically work within that context.
What documents do I need?
As a minimum: 6 to 12 months of bank statements showing regular rental income, and a signed lodger tenancy agreement.
Depending on the amount received, we may also ask for your Self-Assessment tax return or SA302. We’ll confirm exactly what we need once we understand your situation.
Does the lodger need to be a formal arrangement?
Yes. A signed tenancy agreement needs to be in place. This protects you as well as giving us the evidence we need.
Are there any arrangement fees?
No. We don’t charge arrangement or early repayment fees. The rate you’re quoted is the rate you pay.
Do I need to live in one of your membership areas?
You’ll need to meet our membership criteria, which includes living or working in one of our London boroughs, or working for one of our employer partners.