OwnHome - helping you buy a home. Places For People 0% interest loan for deposit

Ownhome is provided by a partnership between Places for People and The Co-operative Bank. OwnHome is part-funded by the government, and is designed to help people who cannot currently afford to purchase suitable accommodation, make their first step onto the property ladder.

This is available to first-time buyers, key-workers and those currently renting social-housing earning less that a household income of £60,000 (that is most of us, right?)

Places for People could lend you between 20% and 40% of the value (equity) of your home for 25 years (or the term of your mortgage if shorter). You will not have to make any interest payments on the Ownhome loan for the first five years.

After five years you will be charged a fixed interest rate of 1.75% on your Ownhome loan each year. After a further five years your interest will be increased to a fixed rate of 3.75% for the rest of the Ownhome loan period.

This is interest only and no capital is repaid through these monthly payments to reduce the size of your Ownhome loan. The interest is charged on the original monetary value of the Ownhome loan, so if you originally borrow £25,000 you will pay interest on £25,000 regardless of how much the equity is worth in the future.

This is not a shared ownership scheme. You will be buying 100% of your property, so there will be no landlord and no rent to pay. You will also be able to make any alterations that are permitted under planning and building regulations.

What happens if I can't afford to pay the interest on the Ownhome loan?
Places for People cannot give financial advice, however, before we make a loan we will make a full assessment of your ability to repay us. We will not make an offer unless we believe that it is affordable for you.

However, circumstances do change, and if you get into financial difficulty it is important that you contact Places for People immediately.

What happens if I can't afford to pay back the loan after 25 years?
How much you will need to pay back in 25 years' time is dependent on the housing market. Nobody knows for sure what the market will do, but you may have to pay us substantially more than you originally borrowed.

THE GREATER THE INCREASE IN THE VALUE OF YOUR HOME, THE MORE YOU WILL HAVE TO PAY BACK.

You will need to have a repayment strategy, which Places for People will discuss with you when you apply for an Ownhome loan.

How do I know if the Ownhome loan is suitable for me?
Places for People cannot give you financial advice. If you feel you need further guidance we recommend that you seek financial advice from an Independent Financial Adviser. Your local HomeBuy Agent can give you details of Financial Advisers with a knowledge of equity loan products.

Who are The Co-operative Bank?
The Co-operative Bank, including smile, is part of The Co-operative, the UK's largest consumer co-operative.

The Co-operative Bank is the only UK high street bank with a customer-led Ethical Policy. They take a stand on issues such as climate change, the arms trade and human rights.

By providing excellent service, competitive products and a choice of ways to access your accounts, they consistently prove that ethics and success can go hand in hand.

How does the mortgage fit withinthe Ownhome loan scheme?
Ownhome is a package delivered in partnership by Places for People and The Co-operative Bank. Once you have qualified for an Ownhome loan with Places for People, you can apply for a mortgage from The Co-operative Bank to cover the rest of the cost of your new home.

What sort of mortgage can I get?
If you qualify for the Ownhome loan, you can choose from a range of simple and flexible mortgages available from The Co-operative Bank.

You can choose between a fixed, discount or tracker mortgage that best suits your circumstances, on a repayment basis for up to 35 years.

There are no additional premiums, fees or charges for being an Ownhome customer.

All mortgages are subject to status and affordability.

What sort of valuation do I need?
You will need to get a full building survey. The Co-operative Bank will guide you through the complete mortgage process.