Saffron Building Society has launched a 95 per cent loan-to-value mortgage for first-time buyers who have been renting for 12 months or more.
The rent to buy mortgage will use the prospective buyer’s rental payment history as evidence of their ability to afford an equivalent monthly mortgage payment. The building society will combine this with a standard credit check in its affordability calculation.
The mortgage is available direct from Saffron and via John Charcol. It is fixed for four years at 6.49 per cent.
The mortgage is available for £195 fee, although Saffron is currently waiving the fee until July 31 for those who apply direct and live in its branch catchment areas.
Saffron sales and marketing director John Eastgate says: “With high rental costs and high inflation, many prospective first time buyers are simply not able to save the substantial deposits required of many current mortgages. We know that there are many potential first time borrowers who are capable of supporting a mortgage as they have been paying these amounts already in rent but are ‘frozen out’ of the market by the large deposits required.”