Findings from the 2015 Lloyds Bank Family Savings study indicate that parental financial support for housing costs is up by a fifth in just 2 years, with 74% of parents believing that it will be even higher in the future. Such support often translates in the form of a gifted deposit however this can be risky as the helper can’t rely on their money being returned should they ever find that they need it in future.
Recognising this, we developed our Family Assist Mortgage, an innovative mortgage product that allows a first time buyer to borrow up to 100% of a property’s purchase price provided that a relative is able to deposit savings equivalent to 20% of the purchase price for a minimum of 4 years.
The savings are kept in an account separate to the mortgage and are returned to the relative after 4 years provided that all mortgage payments have been maintained satisfactorily. The savings are offset against the mortgage balance which means that they proportionally reduce the amount of interest paid by the borrower.
Ian Keeling, our Head of Sales and Marketing said: “UK rental payments were 9.7% higher in October when compared to the same period last year, according to the Homelet rental index. It therefore follows that despite low inflation figures, saving for a deposit is becoming more difficult – many potential first-time buyers are struggling to make the leap from renting to home ownership. We offer an alternative to the traditional gifted deposit with our Family Assist Mortgage which allows family members to link their savings to their relative’s mortgage without handing over the cash directly.”
The Family Assist Mortgage is exclusively available to first time buyers within a 25 mile radius of Stockport. Click here for more information.