Coventry Building Society has set up Moregage, a combined mortgage and unsecured personal loan, allowing homebuyers to borrow up to 125 per cent of the value of their home.
The loan is made up of a mortgage of up to 95 per cent loan to value and an unsecured personal loan facility of up to 30 per cent.
Aimed at both first-time buyers and first-time movers, the product will give borrowers the ability to not only buy their home but also cover associated costs such as funding a deposit, home improvements or buying furniture and appliances. The interest rate is fixed until July 2009 at 6.49 per cent up to 105 per cent, 6.59 per cent to 115 per cent and 6.79 per cent up to 125 per cent.
Research by Coventry reveals that 45 per cent of non-homeowners would save for their deposit and 30 per cent would use a personal or bank loan. Nearly a quarter say they would furnish their homes using a loan or credit card.
Operations director David Stewart says: “We believe that this product offers homebuyers the opportunity to borrow within their means.”