100 Per Cent Mortgage Makes Return To Property Market

For the first time since the financial crisis struck, the 100% mortgage has made a return for property buyers.

Barclays announced that they are offering a three-year fixed rate deal at 2.99%, meaning that property movers no longer need to provide a deposit.

The company's 'Family Springboard' mortgage will be applicable should those buyers earn more than £50,000, but for three years, families or friends of the borrower will have to deposit the equivalent of 10% of the property’s purchase price into a savings account.

How will this help?

This brings good news to parents, as the Family Springboard boosts their children's chances of getting onto the property ladder without parting with as much money as they would have previously.

In fact, reports within the property sector found that a collective total of £5bn would previously have been handed over by parents, with property prices having grown in 2016.

The new Family Springboard mortgage this time removes the need for first-time buyers and home movers to provide a 5% deposit. Changes to mortgages terms and conditions will also benefit those needing to borrow a high income multiple.

Barclays are reportedly willing to expand 5.5 times their income to people earning more than £50,000, having previously raised this by 4.4.

What are the main affects?

Is there a catch though? There is, it seems, one factor to note...

As stated, those parents must pay a 10% deposit into a related savings account (the Helpful Start Account) and leave it there for three years to act as security for the home loan.

Parents should also be prepared for any negative events that may crop up along the way.

The family member – most likely to be a parent – will not get any of their cash back however if the buyer misses a monthly mortgage payment. The whole amount that the family member contributes is 'frozen' until payments have stabilised to the norm.

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