Family Springboard mortgages explained

What are family springboard mortgages?

Family springboard mortgages allow you to borrow up to 100% of a property’s value by linking your mortgage to a friend or relative’s savings.

How does the Barclays Family Springboard Mortgage work?

With Barclays’ Family Springboard Mortgage, you can borrow up to £500,000 on a 5 year fixed rate mortgage over a term of up to 35 years. In terms of how the process works, instead of gifting the money to the first-time buyer, the friend or relative opens a Barclays ‘Helpful Start’ savings account which is linked to the buyer’s mortgage. The guarantor must deposit savings equal to 10% of the price of the house.

This money is then locked away for five years. Assuming the mortgage-holder has made all their repayments, the cash will be returned to the relative or friend at the end of the term with interest.

The idea is that the homeowner will have paid off enough of their mortgage to be able to remortgage to a lower loan-to-value mortgage after the five years.

• Barclays offers the 5 Year Fixed Family Springboard mortgage at 5.99%. 100% LTV. Purchase Only.

Barclays offers a rate of 5.95% on this mortgage if you can put down a 5% deposit. How do these rates compare with that else is on the market? Read our Best first time buyer mortgage rates guide which is updated regularly.

Looking for a mortgage with no deposit? Compare options and see what you can afford. Start the process online and speak to our fee free mortgage partners L&C at any stage. Let them search the market and find the best deal for you.

Which other lenders offer Family Springboard mortgages?

Other lenders offering family-orientated deals include Lloyds Bank. It offers a ‘Lend a Hand mortgage’ which allows a first time buyer to borrow up to 100% of the value of a property providing a family member puts down 10% of the purchase price of the property into a 3 year fixed term savings account. Again, this will be returned with interest after 3 years, as long as payments are up to date.

Similarly, with the Halifax Family Boost Mortgage, you can take out a 100% LTV mortgage when a family member puts 10% of the property purchase price into a 3 year fixed term savings account. For more ways to help your child buy a property read our guide The Bank of Mum and Dad – How to help your child buy a home.

To get the latest mortgage rates on Lloyds’ Lend a Hand mortgage and Halifax’s Family Boost mortgage, speak to our partners at fee-free mortgage brokers L&C.

What are the benefits of these mortgages?

If you’re a first time buyer there are huge benefits of using a family springboard mortgage. The biggest is obvious: you don’t need to save for a deposit, which means you can get on the property ladder sooner.

However, mortgage rates on family springboard mortgages can be much higher than if you saved a 5% deposit and took out a 95% LTV mortgage.

There are benefits to the guarantor as well. For example, it means you can help your loved one without needing to actually give them the cash. You’ll get your money back with interest in a fixed time-frame – as long as all the repayments have been made.

What are the risks with family springboard mortgages?

Family springboard mortgages are a type of guarantor mortgage; if you agree to put up your savings as security and things go wrong the worst case scenario is that you could lose your money.

In fact, Barclays requires the guarantor to get independent legal advice because they want them to understand the implications of putting their money into a Helpful Start account.

The bank warns on its website: “If the homebuyer can no longer make their mortgage payments, we’ll keep your deposit in the Helpful Start Account for slightly longer than the agreed term.

“If we need to repossess the property, you could lose some or all of the money in the Helpful Start account if there is a shortfall between what we’re owed and the amount we sell the property for.”

But even if a lender doesn’t require you to take independent legal advice first, it’s highly recommended that you do so. Also, read more on the pros and cons in our guide Guarantor mortgages explained.

To get more advice on your mortgage options, get in touch with our fee free mortgage partners at L&C

Is there another way get a mortgage with no deposit?

There are other ways to take out a mortgage without a deposit, such as Skipton Building Society’s 100% mortgage. Read our guide How to get a mortgage with no deposit.

Getting a family springboard mortgage? You’ll still need cash to buy a home

Even if you can get a 100% mortgage, there are costs of buying a house that you’ll need to have to budget for including:

• Stamp duty: Firstly, you may need to pay Stamp Duty. First time buyers in England and Northern Ireland are exempt from stamp duty on properties up to £425,000. For properties costing between £425,001 to £625,000 you’ll pay 5% stamp duty, but only on the value above £425,000. Find out more in our guide on First time buyer stamp duty. The guide includes a handy stamp duty calculator.
• Conveyancing fees: Plus you’ll need to budget for conveyancing. This is the legal process involved in buying a house. There’s the cost of getting a survey done too.
• Ongoing costs: And when you own your own home you also face extra costs that don’t apply when you’re renting. For example, you’ll need to maintain the property and buy home insurance.

 Read more in our guide on the costs of buying a house

Boost your deposit

It’s important to get yourself in the best possible position to buy a home by saving as much money as possible.

Setting a budget and sticking to it is still one of the best ways to make sure you’re not spending more than you earn and identify possible savings. Take the time to sit down and work out where your money is going.

And make the most of any savings you do have. Read our guide on How to save for a deposit and make sure to investigate whether you want to take advantage of the government Lifetime ISA to boost your deposit.

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Angela Kerr Director, Editor

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