Post Office Money launches ‘First Start’ mortgage for first-time buyers
First-time buyers will be able to apply for a mortgage with a sponsor, who will act as a co-borrower and have the option to be on the title of the property.
The two highest applicant and sponsor incomes will be taken into account when assessing the level of borrowing, potentially increasing the amount they can borrow.
The First Start mortgage has product options in the 75-95% LTV’s with a maximum loan size of £500,000. The minimum deposit amount is 5% and the applicant needs to earn a minimum of £20,000 per year. It’s available in branches, online and over the phone from today.
Bank of Mum & Dad
The product aims to bridge the millennial/Bank of Mum & Dad conundrum as research shows kids are increasingly having to rely on their parents to buy their first home.
While two fifths of parents are unable to provide any financial assistance to their kids, those who can are likely to give a third of their wealth – £18,396 – to help them onto the property ladder.
Given that deposits in high-demand areas such as London stand at £100k, the Bank of Mum & Dad just isn’t able to keep up.
Owen Woodley, managing director, Post Office Money, said: “We recognise that we need to respond, innovate and deliver products which are responsive to the changing needs of the wide range of these circumstances and our ‘First Start’ mortgage was developed specifically with this in mind.
“In a market where millennials can only afford to save 7% of their income towards a deposit, and therefore the average deposit could take 18 years to save for, aspiring homeowners will now, with the help of their family, be able to purchase a home that meets their needs now, a forever home now rather than a comprise which they quickly outgrow.”
See YourMoney.com’s Help your kids buy a house without handing over stacks of cash for more information on these types of schemes.