Zero deposit mortgage launched by Barclay’s with the Family Springboard Mortgage
Sounds great, well there is a catch to the family springboard mortgage as the borrower(s) will have to have the support of a helper who is willing to put 10% of the purchase price aside in savings linked to the mortgage. This product could be great for people still living at home and want to get on the property ladder but it could be a big ask of family members to commit to something like that However they will get their money back with interest after three years providing there are no missed payments. Worth looking into and available to first time buyers and home movers.
Customers who don’t have any deposit could get a three-year fixed rate of 2.99% with the family springboard mortgage and those with a 5% deposit could get a three-year fixed rate of 2.79%.
Family members opening a helpful start savings account linked to the mortgage will receive an interest rate of 2% (the Bank of England base rate plus 1.5%) which can be cashed in at the end of the three year period providing that the borrower has kept up with repayments.
The zero deposit mortgage launched mainly in response to home ownership being largely considered unaffordable for many single people or couples on low and middle incomes. It has been well documented that there is a great many people and couples living with their families in a bid to save up for a deposit on a home. Two other lenders offer similar products include Lloyds Bank, Lend a Hand mortgage and Yorkshire Building Society Offset Plus mortgage. If these products become popular, more will follow suit so watch this space. However I do wonder that this is the start of the poor lending seen before to the burst of the 2008 housing bubble with mortgage offers of up to six times a person’s salary and 100% plus LTV (loan to value).