Barclays have re-launched their ‘Family Spring Board Mortgage’ which effectively allows borrowers access to 100% mortgages.
The actual mortgage works in the usual way, but Barclays require a family member (or another generous soul) to deposit 10% of the property price into a Barclay’s savings account and leave it there for 3 years.
Not only is the mortgage on an extremely competitive rate at 2.99% (APR) fixed for 3 years, but the depositor receives interest at 1.5% above the Bank of England base rate – which at 2% is also pretty generous.
This innovative style of mortgage helps overcome 3 issues faced by “The Bank of Mum and Dad,” whose only other option is to “gift” the money over, and never see it again:
Once the 3 years are up, the clever people at Barclays have estimated that the property will have increased in value enough for borrowers to remortgage on to an 85% product – another bonus! Assuming the mortgage is up to date at the end of year 3, the family member simply walks away from the arrangement.
I know there has been some bad press around this product, 100% mortgages are still seen as risky – but personally I like it. It ticks boxes and Barclays risk is only really 90%.
For information on this or any other mortgage, please call us on 01628 507 477.
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