NatWest has launched a new Family-Backed Mortgage aimed at helping first-time buyers increase their purchasing power by combining incomes with a family member or friend, while retaining sole ownership of their property.

The bank announced that the product, a Joint Borrower Sole Proprietor (JBSP) mortgage, will enable eligible applicants to add a parent, sibling or friend’s income to their mortgage application. This arrangement could enhance the amount a first-time buyer is able to borrow, without compromising the buyer’s legal ownership of the home.

Under current NatWest products, a buyer with a £28,000 salary and a 10% deposit could typically borrow up to £124,450, giving them a budget of around £138,000. By using the Family-Backed Mortgage, and combining their income with that of a family member or friend earning £45,000, the same buyer could increase their borrowing capacity to £246,000, with a property budget of approximately £273,000.

The family member or friend joining the mortgage will be required to seek independent legal advice before the agreement can proceed, NatWest said.

NEW STRESS RATES

Alongside the new product launch, the bank has also revised its affordability stress rates, in a move intended to bolster the borrowing potential of a wide range of customers. NatWest said that a typical family could now borrow up to £33,000 more than previously possible, while stress-testing future affordability to safeguard against potential rises in interest rates.

Barry Connolly, managing director of homebuying at NatWest, said: “We are committed to providing more pathways to home ownership and helping first-time buyers to achieve their goals.

“Today’s launch of the Family-Backed Mortgage boosts the borrowing power of prospective homeowners by enabling them to combine incomes with a family member or friend, while retaining independence to own a home in their own name.

“In addition, we also announce that we have revised our affordability rates for mortgage customers, boosting the borrowing potential of hundreds of thousands of potential homeowners, whilst continuing to ensure that they can afford their mortgage over the long term.

We believe that this twin announcement can help instil hope amongst our customers that their dreams can be realised.”

NatWest already offers mortgages of up to 95% loan-to-value to eligible customers and accepts deposits or gifted funds from immediate family members, treating them as the buyer’s own deposit.