Barclays is launching a guarantor mortgage that allows family members to use their savings to help first-time buyers onto the housing ladder.
Tipped by Money Marketing in June, the family springboard mortgage will be available to borrowers with a 5 per cent deposit. A family member must deposit 10 per cent of the purchase price in a specific Barclays savings account.
The product, which launches on 14 January, will be available to homebuyers through branches and intermediaries. It is fixed for three years at 4.69 per cent and there is a £499 fee.
The family member will get their savings back after three years, if all of the mortgage payments are met, and will receive interest at an annual equivalent rate of base rate plus 1.5 per cent.
Barclays managing director of intermediaries David Finlay says: “We genuinely believe with this, along with some of the other stuff we have done, we will start to help first-time buyers back into the market.”
The product is part of the bank’s broader campaign to target first-time buyers that began in June with the launch of the family affordability plan, which allows parents and children to pool their income to secure a larger loan.
Emba Group sales and marketing director Mike Fitzgerald says: “This is a great way to earn money while helping out your kids.”