Bath Building Society is launching a 100 per cent loan-to-value three-year fixed rate guarantor mortgage with a 5.29 per cent rate.
The parent-assisted mortgage scheme is limited to applicants in the South West of England. It requires third party collateral in the form of a charge on the parental home equivalent to 25 per cent of the house being purchased.
The product has an administration fee of £100 and an arrangement fee of 0.5 per cent of the advance, with a minimum of £599.
The society lends direct and through intermediaries.
Bath Building Society chief executive Dick Jenkins says: “The 100 per cent PAMS is intended to open up home ownership to a wider demographic in a responsible, sensible way, giving young people the opportunity to enjoy the benefits of home ownership just as their parents did.This is also a sign of confidence that the housing market is starting to slowly recover and that first-time buyers will be a part of that recovery.
“Let me be clear this is not a return to the indiscriminate 100 per cent lending that was in vogue on the eve of the credit crunch. We will be assessing all applicants carefully to make sure the deal is right for them and that they are comfortable with how the mortgage works.”