31 Mar 2022
Family Assisted Mortgages
With house prices and the cost of living increasing – helping more than one child on to the property ladder is difficult. Lenders are looking to assist borrowers and the ever-stretched bank of mum and dad.
Here are some ways families can help each other get on the ladder…
Family assisted mortgage:
A family springboard mortgage (can also be known as a family deposit mortgage) is a type of mortgage product for people with only 5% deposit and a relative able to help them out by placing savings into an account that the mortgage will be offset against.
Depending on the lender, restrictions and criteria can vary.
How do they work?
The buyer will put in a 5% deposit and will borrow 95% with a traditional mortgage. However, in addition to this a family member deposits 10% of the purchase price into a savings account with the lender, who takes charge over the funds as security in event of default.
A mortgage that protects your deposit – interest free should you need to repay – this could be monthly or when it comes to a remortgage or selling. Additionally, your loan will benefit from any increase in the property.