The new mortgage is not restricted to first home purchasers. Fixed for 3 years at 4.69%, it reverts to a lifetime tracker at base rate plus 3.99%. There is a £499 fee.
Talking about it with colleague James Hammond, he says, “Reading the small print there is still the need for more than 5% cash, but I certainly feel this could be an option for a lot of Cambridge clients.”
The Family Springboard Mortgage works by having a form of guarantor. As well as the buyer paying a 5% deposit, a family member must put 10% of the purchase price in a special Barclays Helpful Starter Account. After 3 years the money is released if all the mortgage payments have been met in that period.
Unlike a conventional guarantor mortgage, the supporting family member is not named on the mortgage. The interest rate on the savings account is 1.5% over the base rate.
James is right – this could well suit Cambridge buyers, who can only afford a small deposit but can borrow more off their parents. After years of caution among lenders, this is a creative solution to help first-time buyers get on to the property ladder.
For advice on the Woolwich Family Springboard Mortgage, or any other mortgage products, don’t hesitate to contact me.