Family Building Society has entered the 100% LTV arena with the launch of an enhanced Family Mortgage offering up to full purchase price lending backed by family security.
The 5-year fixed product is priced at 5.19% and comes with no application or product fees. Borrowers can access up to 5.33 x loan-to-income, with mortgage terms extending to 40 years to support affordability.
The deal is available for purchase applications only with a minimum loan size of £96,000 and a maximum of £750,000. While the product allows lending up to 100% LTV, the minimum starting LTV is 80%.
Borrowers are not required to provide a deposit themselves. Instead, family support must cover 20% of the property value, either in full or alongside any contribution from the buyer.
PROPERTY CHARGE
That support can be structured in two ways or a combination of both. Family members can place savings into the lender’s Family Security savings account, earning 3.05% AER variable or allow the society to take a collateral charge over their property for the amount required to make up the 20%.
The security remains in place until the end of the 5-year fixed period, at which point it is released, subject to conditions.
Support can be provided by parents, grandparents or other family members.
Support can be provided by parents, grandparents or other family members and does not require a gifted deposit, potentially widening access for buyers who are income-secure but deposit-light.
The move marks a significant push into high-LTV lending, as lenders look to address affordability constraints and help first-time buyers and home movers bridge the deposit gap without relying on traditional cash gifts.
NATURAL EVOLUTION
Darren Deacon, head of intermediary sales, says: “We were one of the first lenders to involve family members in the process of helping their children onto the property ladder some 12 years ago.
“Today’s launch of our enhanced Family Mortgage is a natural evolution in its development and reflects the help that is even more necessary today for first time buyers and next steppers.
“Having built up significant equity in their own property over the years, we know family members are keen to help their children and grandchildren on the property-owning journey, by using a small part of this equity as security.
“Equally, we know that gifting a deposit isn’t always possible or practical, but families may have savings that can be put to good use. Our new Family Mortgage offers a route to home ownership that offers hope to those struggling to get on the property ladder and for growing families looking for their next move.”
