Lloyds TSB have released a new package for first time buyers called lend a hand.
- 95% LTV
- Low initial cost
- Low interest rate (around 1% less than other similar packages) - and FIXED for 3 years
The catch? There is one - it is as follows:
Someone needs to guarantee the mortgage. This is done by placing £20k in a LTSB Savings account at 3.1% fixed for three years. After this, these savings can be withdrawn.
Yes - this is limited to a subset of people, and yes there is a catch.
However, the savings accoutn rate is fairly competitive (if not market leading) and certainly the mortgage itself is by far and away market leading for this TYPE of mortgage (FTB, 95% LTV).
From the website:
With the Lend a Hand Mortgage, you only need a 5% cash deposit, plus the backing of someone who wants to help you onto the property ladder by putting their savings up as additional security for the mortgage.
Your Helper will need savings equal to 20% of the property value.
Your deposit of and the savings of your helper must equal 25% of the property value.
They still earn interest on their savings, but it means that you can benefit from the lower mortgage rates normally available to customers with a 25% deposit.