The building society has launched the new Delayed Start Mortgage to give homebuyers time to settle in with no mortgage repayments due for the first three months.
Costs of homebuying
The mutual conducted research which showed that first-time buyers (FTBs) are spending upwards of £30,000 in the first three months of moving into their new home, causing 63% of to feel financially strained. Nearly three-quarters (71%) said the entire moving process cost a lot more than they expected.
Skipton’s research revealed that first-time buyers spend nearly £3,500 on average on furniture, £2,600 on kitchen appliances, and £1,700 on removal companies.
More than a third (35%) were juggling costs for two properties, as rental agreements overlapped with moving in.
How the new mortgage works
Skipton’s Delayed Start mortgage will enable first-time buyers to settle into their new home with no mortgage repayments due for the first three months, allowing them to manage the extra costs associated with buying and moving into their first property.
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Interest will accrue from day one and will be added to the overall mortgage balance.
The mortgage is available up to 95% of the property’s value and is exclusively for first-time buyers. The mortgage is compatible with Skipton Income Booster.
Rates start from 4.87% for those with a 10% deposit and 5.2% for borrowers with just 5% upfront.
Jen Lloyd, head of mortgage products at Skipton, said: “We hope that this product will help first time buyers settle into their new home and help ease the strain of the costs that come with buying first home that go beyond the deposit.
“At Skipton, we believe in fairness, that’s exactly why we’ve launched our new Delayed Start Mortgage – to give first-time buyers a fair start in their new home, and the breathing space they need in those critical first few months.”
Andrew Montlake, CEO at Coreco mortgage brokers added: “Delaying payments for three months can help take the pressure off in the early days when settling in and making a house a home is a top priority.
“Of course, this product will not suit everyone, and professional advice should be taken to fully understand the product, but it is yet another welcome option available to homebuyers that gives them choice.”
