Beverley Building Society has added a 100% Loan to Value (LTV) option, a first-time buyer mortgage option to its family assistance range.
The new product will allow family members to temporarily authorize a charge to be placed on their own home as security instead of a deposit.
The Home Assistance Mortgage is available at a variable rate of 2.75% over three years, a discount of 2.49% from the standard variable rate.
The new product has a fee of £800 plus the cost of an independent valuation of the purchased property and, in some cases, parental property offered as collateral.
Upon subscription, 20% of the purchase price is charged to the parental home, which is subject to a maximum loan-to-value ratio of 50%, including any existing mortgage.
The guarantee remains in place for eight years and will be released subject to an independent valuation confirming that the value of the property purchased has increased enough to at least replace the deposit or that the guarantee can be released sooner if the amount of the deposit is repaid in full by the borrower. .
The Beverley Building Society expects the deal to appeal to wealthy parents or grandparents who want to help their offspring move up the housing ladder, but can’t afford to offer them a deposit in cash or simply prefer to keep their savings.
The product was added following recent National House Price Index figures which showed a 14.3% increase at the end of March, the company says.
Simon Glass, head of new business loans at the Beverley Building Society, said: “The situation with rising property prices may make it harder than ever for first-time buyers to get on the ladder. housing and as a result we have seen growing interest in our caregiver mortgages in general. »
‘However, there was a clear gap in trying to meet the needs of families who want to help but are not wealthy in savings, despite having built up significant equity in their own homes over the years.’
“We saw a golden opportunity to help them use this to help their loved ones become homeowners, without having to part with their own hard-earned savings.”