THE FAMILY MORTGAGE
The principle behind the Family Mortgage is simple. We know millions of young people still live at home or are struggling paying expensive rent.
That means they will only have a small deposit to put down on a property and they miss out on most of the better mortgage rates. At the same time, families may have savings and property that could be used as security for a buyer. The Family Mortgage brings these wider family assets into the mortgage calculation, helping to reduce the cost for the buyer but not asking family members to hand it over as a gift.
The following short video explains how the Family Mortgage works...
You probably have a lot of questions about how the Family Mortgage could work for you - we are here to help!
We've got two calculators that show how the Family Mortgage works. Try our affordability calculator to see how much you could borrow, or try our repayment calculator to see what your monthly repayments with the Family Mortgage would be.
For more information read our Family Mortgage Lending Criteria or, if you're in a bit of a rush, you can complete the 'Four Quick Questions' form here.
Working with family members helps buyers:
- get lower interest rates, meaning lower monthly payments;
- pay interest on a smaller amount of the mortgage, meaning lower monthly payments;
- increase your buying power when choosing a property to buy.
Working with buyers helps family members to:
- put assets to work for the buyer as security for the mortgage;
- help the next generation own their own home without giving the money as a gift.
A mortgage of £282,800 payable over 25 years initially on a fixed rate for 3 years at 2.69% and then on our variable Managed Mortgage Rate, currently 4.54%, for the remaining 22 years would require 39 monthly payments of £1,295.92 and 261 monthly payments of £1,543.56, plus one initial interest payment of £645.81.
The total amount payable would be £454,950.85 made up of the loan amount plus interest £171,330.85 and an application fee of £175, product fee of £545 and a mortgage exit fee of £100.
The overall cost for comparison is 4.1% APRC representative.