The 95% Mortgage Comeback

Limetree Financial Services Limited

The 95% Mortgage Comeback

This month the Woolwich entered the market with an exceptional 95% loan-to-value mortgage deal. The Family Springboard Mortgage will no doubt set the cat amongst the lenders and will increase activity in the first time buyer sector of the market.

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.

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