How Banks are Treating Flatmates and Boarders Income

Wondering how the bank would take into account income from a boarder or flatmate? Mortgage Lab CEO Rupert Gough takes you through what you need to know.

"Firstly, let’s clarify the difference between a boarder and a flatmate because it’s important for your application.  A flatmate is someone who rents a room at a fixed price and shares the costs such as food with others in the house. A boarder, on the other hand, pays a set amount which might include the room, prepared meals and laundry etc.

The policy for including flatmate income in mortgage applications changes as banks welcome or shy away from higher risk lending.  As a general rule, banks don’t like applications to rely on flatmate income if the mortgage is over 80%.  So those with, what the banks class as a small deposit - being under a 20% deposit - generally need to be able to afford the mortgage on their own income..."

You can watch a video on the same subject here: https://youtu.be/utkX-qHz1gk

If you are unsure where to start or have any questions, don't hesitate to contact the team at mortgagelab.co.nz/contact-us, we're here to help.

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