Parental help could secure first-time buyer mortgage

22-Apr-2009

Bath Building Society has become the latest lender to launch a mortgage product tailored towards the needs of first-time buyers.

Its Parental Assisted Mortgage Scheme is designed for people trying to get on to the property ladder, but unable to save sufficient money for a deposit.

The building society will lend first-time buyers up to 90 per cent loan-to-value, providing they are able to persuade a parent to act as guarantor for the mortgage.

Parents will also need to use some of the equity in their home as collateral.

Bath Building Society's head of lending Malcolm Graham-Jones said he expects the new mortgage to prove popular in current market conditions.

"With lower interest rates in the market, and the value of properties well below their peak, we can envisage a number of people wanting to take advantage of this product," he claimed.

The size of deposits lenders require from first-time buyers has shot up since the start of the credit crunch, meaning many people need to save more than £30,000 in order to obtain a mortgage.

However, Abbey recently launched an 85 per cent loan-to-value mortgage package aimed at first-time buyers.

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Council tax cut for first-time buyersIncrease in mortgage approvals for first-time buyersFirst-time buyers can buy a house with an equity loan

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