Mortgage and Rent to Buy

[Dino D]

Scenario: property worth 500k (market valuation from surveyor).
Tenant paying 1,500 rent pm.

Tenant proposes to buy property for 520k by paying as follows:
15k down now.
1,500pm 'rent' over 5yrs (to be deducted from sale price) = 90k.
After 5yrs 415k remains to be paid.
Tenant proposes to get mortgage for that balance.

Will the 105k paid by that time count as a deposit for mortgage purposes or will the lenders still want 25% of the 415k as a deposit?
This is assuming the property value remains static at 500k.

Edited by Dino D on Saturday 29th September 21:18

[Dino D]

Would the lender take any account of the fact that the buyer has paid off a large chunk already or just look at as loan on a house that is being sold BMV and usual deposit rules apply?

[Dino D]

So rent really is the wrong word to use here as its actually a payment towards to property.

So if we called it the correct name, say 'consideration' rather than rent is the other way to structure this so that after 5 years the buyer can get a mortgage and have the payments to date considered as deposit on a loan for the remaining balance ?

[Dino D]

I'd be interested to hear more - please pm me?