Saffron Building Society has launched a 95% loan-to-value ‘Family Support’ mortgage at 2.97%, giving brokers new options for first-time buyers.
The mortgage requires that a member of the borrower’s family holds another 5% of the purchase price in a Saffron Family Support Savings Account. At the end of the five-year term, the funds are returned with interest (currently 0.75% per annum).
Anita Arch, head of mortgage sales at Saffron Building Society, said: “Our members told us that they’d like a way of supporting their families financially in the early years of home ownership but, when they found their feet, to have the money they provided returned.
“These funds might be needed as part of retirement planning for example. A gifted deposit is often seen as an ideal way to assist, but ‘gifted’ money is not repayable which means it is not always the ideal solution.”
Arch added: “In addition, the family member providing the support receives interest on their funds, at the end of the five-year term.
“We see this as a great way for families to help each other, and is a welcome addition to the ‘gifted deposit’ option we offer on all our mortgages.”
The mortgage has a minimum loan amount of £30,000 and a maximum of £500,000.