Lend a hand
How parent power can help your kids go it alone
With prices so high we all know how hard it is to get on the property ladder. Our new 'Lend-a-hand' mortgages are designed so parents can give their children a step up when it comes to buying their first home. 'Lend-a-hand' mortgages are available on many of our mortgage options and they work like this:
- It's a joint loan to the parent and child. Your child borrows up to 75% of the required loan - provided they can support it from their income. The parent 'tops up' the other 25% to a maximum of 1x their basic income.
- Both you and your child will be legally responsible, both jointly and separately for repayment of the loan in full.
- Your child's annual income (x 3.75) must equal or exceed 75% of the loan requested.
- The parent's annual income must equal or exceed the remainder of the loan requested.
- Both child and parent are named on the mortgage deed, but only the child has the legal title to the property.
Here's an example of how this could work:
| Loan needed: £75,000 | |
| Son earns £17,000, father earns £22,000 | |
| Son's income must cover at least £56,250 (75% of the loan required) |
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| Therefore, son's income £17,000 x 3.75 | = £63,750 |
| Plus father's income x 1 | = £22,000 |
| Maximum loan amount | = £85,750 |
So, with a little help your child gets their first home - and you get some peace and quiet too!
The overall cost for comparison is 6.9% APR. Maximum term 40 years, subject to standard retirement criteria. Parents must be employed or self-employed. Pensions, investment income and/or benefits are not acceptable forms of income when calculating the amount that can be borrowed. Three months' payslips/employment reference required for parent and child. The parent is not named on the legal title of the property. The property will only be registered in the child's and the child's partners name (if applicable) . The parent will be a party to the Mortgage deed and will have joint and several liability for the mortgage debt (this means that all parties to the Mortgage Deed will be liable for the entire sum borrowed).
The standard minimum advance is £20,000 (unless stated otherwise).