Family Building Society has announced the launch of an enhanced Family Mortgage, available up to 100% LTV.
The product is designed to support first-time buyers and home movers with the assistance of their family.
The five-year fixed rate is available at 5.19%, with no application or product fees, up to 5.33 x LTI. It is available for purchase applications only with a maximum loan size of £750,000.
An initial deposit from borrowers is optional, but not required.
Family members have the flexibility to provide security for a family member's mortgage in one of two ways (or a combination of both) provided the total security, plus any initial deposit, adds up to 20% of the property value.
Family members can place their savings into a Family Security savings account, earning interest at 3.05% AER variable, and/or allow the building society to take a collateral charge over their property for the amount needed to make up the 20%.
The security supports the mortgage until the end of its fixed rate and is then released (subject to conditions).
Support can come from parents, grandparents or other family members without the need to provide a gifted deposit.
Darren Deacon, head of intermediary sales at Family Building Society, commented: “We were one of the first lenders to involve family members in the process of helping their children onto the property ladder some 12 years ago.
"Today’s launch of our enhanced Family Mortgage is a natural evolution in its development and reflects the help that is even more necessary today for first-time buyers and next steppers. Having built up significant equity in their own property over the years, we know family members are keen to help their children and grandchildren on the property-owning journey, by using a small part of this equity as security. Equally, we know that gifting a deposit isn’t always possible or practical, but families may have savings that can be put to good use.
"Our new Family Mortgage offers a route to home ownership that offers hope to those struggling to get on the property ladder and for growing families looking for their next move.”
