The scheme allows borrowers with smaller deposits – borrowers can have mortgages with just a five per cent deposit – to access better rates by backing up their funds with the savings of a parent or family member.
Borrowers with a five per cent deposit can get rates from 4.79 per cent with a £895 fee. At the same time, their helper – parent or family member – is offered a competitive savings rate, as a legal charge is taken over the savings to offset the risk.
Commercial director of mortgages Stephen Noakes says: “It’s not always easy to pull together a big deposit in today’s market, but this product can make the move to a new home not only more achievable, but more affordable.
“The Lend a Hand mortgage has been a very successful way for people to take their first steps in the housing market. It’s great news that it can now support those that are looking to move up the ladder too.
“The product retains all of the features that make it so unique – borrowers can move with just a 5 per cent deposit but without the high price tag that it would normally bring. At the same time, their family can provide their support and benefit from a competitive savings rate.”
Lloyds TSB is also announcing the launch of a campaign looking at the challenges facing first time sellers in today’s market. This will include how they manage the process of selling their first home, how they deal with fewer product choices and how they switch their mortgage product for the first time.