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First Time Buyer

Housebuilder offers to pay your mortgage for 10 months

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
04/01/2023

Housebuilder Persimmon is offering to pay a housebuyer’s mortgage for up to 10 months for customers buying a new build property.

The deal is available to those who reserve a new Persimmon or Charles Church development by Tuesday 31 January 2023 (requires a £500 deposit), with the builder suggesting it would free up cash to help buyers deal with the rising cost of living. 

There’s no limit on how many people can take up the offer but it excludes buy to let, as well properties bought through other schemes, such as the First Homes Scheme.

Buyers can get the offer using any lender and any mortgage deal as Persimmon confirmed to YourMoney.com that there are no restrictions on loan-to-values (LTV).

However, there is a value limit of up to 5% of the sales price of the home (across 10 months) and exchange of contracts would need to take place within six weeks.

Persimmon claims that the average price of a home built by the firm is around 20% lower than the national average, with around half of its customers being first-time buyers.

Based upon the average value of a Persimmon home (as reported in its half year results in July) standing at £245,000, it provides the following calculations to show the breakdown of its deal:

House purchase price: £245,000
Mortgage 95% LTV: £232,750
Deposit 5%: £12,250
Term: 40 years
Product: Halifax five-year fixed rate at 5%
Monthly payment: £1,122.31
Total Incentive of the Move in mortgage-free for up to 10 months offer: £11,220.

Evidence of the projected payments will need to be supplied by the mortgage broker in order for buyers to take advantage of the scheme as it will be based on the actual mortgage offer. 

Persimmon added that the aggregate sum will be sent from the solicitor to your account to cover the 10 months of mortgage payments.

Sonia Da Costa, chief customer experience officer at Persimmon, noted that the “volatile mortgage market”, combined with the rising rate of inflation, had meant many would-be buyers were concerned about whether they could really afford to purchase a new home.

She added: “The chance to move into a new home mortgage free for up to 10 months will give potential home buyers some breathing space and ensure the path to a new Persimmon home provides real help with the cost of living.”

Back in November, Persimmon reported a drop in sales and an increase in cancellations, which it blamed on the turmoil of the mortgage market in the latter months of 2022.

Related: End of Help to Buy: 10 alternatives for first-time buyers