Saffron Building Society has unveiled a new 95% mortgage for first time buyers who have been renting for 12 months or longer.
The product – know as ‘Rent to Buy’ – will use the prospective buyer’s rental payment history as evidence of their ability to afford an equivalent monthly mortgage payment and will combine this assessment with the standard credit history checks.
The repayment only mortgage is available direct from Saffron’s branches and by phone and via broker John Charcol. It has a rate of 6.49% which is fixed until 30th April 2015.
The Saffron said its recent research* found that 21% of those currently renting privately would like to take a fixed rate mortgage as they believe rates will rise soon compared to only 9% who would like to take a tracker or standard variable rate mortgage.
The mortgage is available with a £195 fee although Saffron is currently waiving this fee until 31 July for those who apply direct and live in its branch catchment areas.
John Eastgate, Saffron’s sales and marketing director, said: “With high rental costs and high inflation