Barclays launches family first-time buyer mortgage
The three-year fixed rate mortgage is aimed at first-time buyers and their families and requires a buyer to put down a 5% deposit to obtain a mortgage at 4.69%.
At the same time, a family member must place savings worth 10% of the property purchase price into a linked savings account, which can be withdrawn after the three year period is up.
Mortgage Advice Bureau director Andrew Frankish said he welcomed the announcement and hoped it would be followed by other major lenders launching new products at higher loan-to-velue (LTV) levels.
“Any high loan-to-value targeted at first-time buyers is good. The fact that it is Barclays is very important as well.
“We have had similar products with a parent guarantor from niche lenders but with Barclays coming in with this product it grabs consumers’ attention.”
First Service Financial director Jonathan Plant described the product as ‘promising’ and said it would be useful in certain circumstances:
“It has the advantage that Bank of Mum and Dad do not give their money away. “The return on savings accounts is so bad at the moment – if the money can be used to help offspring while getting it back at the end of three years it is a good thing.”
The deal, which will be available from 14 January 2013, requires the family member to deposit their savings into a Helpful Start Account with an interest rate of Bank Base Rate plus 1.5% (current pay rate 2%).
Mortgage payments must be kept up to date for the saver to withdraw their funds promptly.