Nationwide launches family ‘gifted’ deposit mortgage range
The flexible Family Deposit Mortgage is targeting parents keen to support first-time buyers, anyone looking to move home and elderly relatives. All cash raised must be gifted towards a deposit up to a total mortgage borrowing of 80% LTV.
The definition of family includes spouses, civil partners and step children, alongside blood relations.
The Family Deposit Mortgage cannot be opened online and products are available direct and through brokers.
Both existing Nationwide borrowers, those remortgaging from another lender and unencumbered homeowners can apply for the product to raise extra capital for a family member. However, the buyer receiving the funds must take out his or her own mortgage with Nationwide, selected from any product in the standard mortgage range.
Existing Nationwide mortgage customers can access the product as a further advance.
Nationwide analysis suggests a large proportion of new mortgage lending involves wholly or partly gifted deposits with the average UK first-time buyer deposit amounting to £28,200, rising to £65,600 in London.
The range includes a two-year fixed rate, a five-year fixed rate and two-year tracker rate with a £999 fee or fee-free.
Rates are fee-free and start at 1.15% for the two-year tracker and 1.20% for the two-year fixed rate, both with a £999 fee, which is a discount of 0.09% on the core product range.
The discount on the core rate for the further advance is 0.20% and rates start at 1.34% for the two-year tracker and 1.39% for the two-year fixed rate.
Nationwide’s head of mortgages Henry Jordan said: “We know that trying to raise a deposit can be the most significant barrier to becoming a home owner. This Nationwide range will enable families to give mutual support to each other and provide new options for home ownership.”