The products allow parents to act as security on their children’s mortgage, but Halifax says these deals are being withdrawn due to a lack of demand.
The lender will instead offer another first-time buyer product, previously offered through Lloyds TSB, called Lend a Hand, which is not available through mortgage brokers.
Lloyds says the product has proved more popular than Halifax’s guarantor mortgage.
Lend a Hand requires borrowers to put up a 5 per cent deposit, but if parents have savings equal to 20 per cent of the property value in a Lloyds savings account, borrowers can access the rates available to someone with a 25 per cent deposit, while their parents continue to earn interest on their savings.
A spokeswoman for Lloyds Banking Group says: “We were a strong supporter of the first time buyer market in 2009, representing nearly 50 per cent of the shared equity, shared ownership market and driving new innovation like the LTSB Lend a Hand scheme which enables customers to get 95 per cent lending through taking a charge on a parent or grandparents savings account.
“This drive continues in 2010 as we look to provide more support in new build and find ways to extend the Lend a Hand activity which already accounts for a third of first time buyer lending in the LTSB channel.
“Given this new activity we are finding that the demand for guarantor mortgages is reducing and now represents a tiny proportion of new business and one that brokers have shown no real appetite for.”