As long as a family member contributes 10% of the property purchase price from their own savings, FIRST-TIME buyers can borrow £500,000 with no deposit mortgage at Barclays.
Barclays has extended its Family Springboard mortgage range so first-time buyers can get larger mortgages over a longer period of time
When Was It First Introduced?
First introduced 6 years ago, the deals let home buyers borrow deposit-free by linking their mortgage to a friend or family member’s savings.
Borrowers can get more money as yesterday, Barclays upped the fixed rate period of three years to five and extended the affordability assessment term from 25 years to 35.
Coming with a fixed rate of 2.95%, the fee-free mortgage allows home buyers to borrow between £5,000 and £500,000. It comes with a fixed rate of 2.95%.
Barclays is also offering a five-year fixed rate of 2.75% if the home buyer has a 5% deposit to put in on top of the 10% savings.
As security for the home loan, the savings are locked away in Barclay’s fixed-term savings account for five years.
However, it should be noted that if you miss your mortgage payments, your family’s money is at risk as the bank may hold onto the savings for longer than five years.
The mortgage works like this. The family member who stumps up the effective deposit sets up a “Helpful Start” savings account with Barclays once the bank has made a mortgage offer.
After 5 years, whoever helped you with the funds will be refunded their 10% plus interest.
This rate is set at 1.50% above the Bank of England’s base rate of 0.75%, meaning savers can currently earn 2.25% in interest on their savings.
Comparison
In comparison, the best buy five-year fixed rate savings account is currently 2.75% from Gatehouse Bank.
The idea is that the homeowner will have paid down enough of their mortgage to be able to remortgage to a lower loan-to-value mortgage once the fixed term is up.
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