The Saffron Building Society has launched a ‘Family Support’ mortgage with new options for first-time buyers.
The new product is fixed for five years at 2.97%. A customer must provide a 5% deposit (which can be a gifted deposit). A member of their family holds another 5 % of the purchase price in a Saffron Family Support Savings Account linked to the mortgage for the duration of the five year fixed term.
The funds cannot be accessed for the five year fixed term of the mortgage.
At the end of the five year term, the funds are returned with interest paid.
The Saffron pays for the customers valuation and there is no arrangement fee on the mortgage.
The minimum loan amount is £30,000, maximum £500,000.
Anita Arch, the Saffron Building Society’s head of mortgage sales, said: “Our members told us that they’d like a way of supporting their families financially in the early years of home ownership but, when they found their feet, to have the money they provided returned.
“These funds might be needed as part of retirement planning for example. A gifted deposit is often seen as an ideal way to assist, but ‘gifted’ money is not repayable which means it is not always the ideal solution.
“In addition, the family member providing the support receives interest on their funds, at the end of the five year term. We see this as a great way for families to help each other, and is a welcome addition to the ‘gifted deposit’ option we offer on all our mortgages.”