The Delayed Start Mortgage lets you postpone your first repayments: Is it a good idea?

The newly-launched Delayed Start Mortgage allows first time buyers to put off their first three mortgage payments, but what’s the catch? We take a look.
The Delayed Start Mortgage lets you postpone your first repayments: Is it a good idea?

Skipton Building Society has launched a new mortgage that allows first time buyers to delay their first three mortgage payments.

A survey from the lender found first time buyers faced high costs when buying their homes, including an average of nearly £3,500 on furniture and £2,600 on kitchen appliances, causing 63% to feel financially strained.

And so the Delayed Start Mortgage was designed to soften the blow.

How the Delayed Start Mortgage works

  • Delayed Start Mortgages are available to first time buyers who have a minimum 5% deposit. The mortgage rate you’ll pay depends on the size of your deposit, whether you take out a 2 year fix or 5 year fix and whether or not you’re buying a new build.
  • For example, Skipton offers a Delayed Start 5 year fixed rate mortgage at 5%, up to a maximum LTV of 95%. This means you’ll need a 5% deposit.
  • Once you’ve completed on your new house, you won’t need to make repayments for the first three months. So it’s a bit like a Buy Now, Pay Later deal but with your mortgage.
  • If you’re buying with someone else, at least one of you needs to be a first time buyer to be eligible for this mortgage.

Not sure if this mortgage could work for you? Speak to mortgage brokers L&C for advice that won’t cost you a thing. Start online or give them a call today about your mortgage needs

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Advantages of delaying your mortgage payments

The main advantage of delaying making your mortgage payments is the fact it makes buying your first place more affordable. All the extra costs of buying a house can come as a shock to first time buyers. So not having to pay your mortgage for the first three months is the main benefit.

  • For example, if you take out a £200,000 mortgage over 30 years on a 5 year fixed rate of 5%, your monthly mortgage payments would be £1,074 during the initial term. So if you delay your first three months’ payments you’ll ‘save’ over £3,200.

Also, if you take out this mortgage with Skipton Building Society, the lender allows you to combine it with its Income Booster mortgage, which is a Joint Borrower Sole Proprietor (JBSP) mortgage.

Disadvantages of delaying your mortgage payments

If you’re a first time buyer, the appeal of not having to pay your mortgage for the first three months of homeownership is obvious. But you need to consider the downsides of these mortgages before taking one out.

1. You’ll pay more overall!

Even though you’re delaying making your first mortgage payments, the interest will start accumulating from day one. This means you’ll pay more in interest over the term of your mortgage and your mortgage payments will be slightly higher once you do start paying.

  • For example, if you take out a £200,000 mortgage at 5% over 30 years, you’ll accrue interest of around £834 each month you’re not paying your mortgage. Over three months this will add up to around £2,500 which will be added to the mortgage balance.

2. You could miss out on better mortgage deals

Mortgage lenders have been cutting mortgage rates on fixed deals across the board in recent months so it’s important to investigate the best first time buyer mortgage rate available to you from across all lenders – instead of simply being drawn to this mortgage.

Delayed Start Mortgage rates vs other mortgage rates on the market:

  • If you have a 5% deposit, the Delayed Start Mortgage is available as a 5 year fix at 5%.
  • By comparison, if you have a 5% deposit, Skipton offers a standard 5 year fixed rate mortgage at the lower rate of 4.94%.
  • While if you have a 5% deposit and go to Nationwide, for example, they offer a 5 year fixed rate mortgage at 4.83%.

So make sure you shop around. The easiest way to do this is by speaking to a fee-free mortgage broker. And keep up to date on the latest with mortgage rates with our guide First time buyer mortgage rates.

3. Can you afford to buy a house?

Noone doubts how difficult it is for first time buyers to get on the property ladder and we welcome lenders coming up with new ways to support borrowers.

But if you’re considering this mortgage because you’re worried about how you will afford to cover your mortgage costs in the first few months, you should consider carefully whether or not you can afford to buy at the moment.

For more information on first time buyer mortgages and how to apply, read our guide on First Time Buyer Mortgages.

And speak to a fee-free mortgage broker to find out exactly how much you can borrow and what your monthly repayments will be.

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Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.

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An expert’s view on Delayed Start Mortgages

Paula Higgins, CEO of HomeOwners Alliance, said:

Paula Higgins CEO HomeOwners Alliance

“Moving costs, broadband set up, furnishing your new home… we know the costs really mount up when you buy a new home and the first few months can be tricky. So it’s good to see Skipton have done it again in being so innovative in finding solutions for first time buyers. A Buy Now, Pay Later deal but for mortgages is a clever concept that gives new home owners some breathing space.

“But we’d advise first time buyers to shop around first and check how rates on this mortgage compare to other mortgage deals they can qualify for because the short term gain may not be worth the longer term pain from paying a worse rate for the entire length of your mortgage. So make sure you get fee-free expert mortgage advice so you’re fully informed about your options.”

Mortgage Finder

Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.

Find a mortgage

Frequently Asked Questions

Will I have to make all 3 payments on month 3?

No. With the Delayed Start Mortgage, you don’t pay your mortgage for the first three months. Then your outstanding mortgage balance (including the interest you’ve accumulated in the first 3 months) will be spread across the rest of the term. This means your mortgage payments will be a bit higher each month than if you hadn’t delayed your mortgage payments.

Can you get this with a 0% deposit?

No, you can’t get this mortgage with a 0% deposit, you’ll need a minimum deposit of 5%. However, Skipton does offer a 0% deposit mortgage for people with a proven track record of paying rent. Find out more in our guide on 100% mortgages.

Will I pay more overall if I get a Delayed Start Mortgage?

Yes, you will pay more overall if you get a Delayed Start Mortgage. This is because you’ll accrue interest on your mortgage during the months when you are not making repayments. For example, if you take out a £200,000 mortgage at 5% over 30 years, you’ll accrue interest of around £834 each month you’re not paying your mortgage. Over three months this will add up to around £2,500 which will be added to the mortgage balance.

I’m buying with someone else. Do we both need to be first time buyers?

No. Skipton says that ‘at least one applicant needs to be a first-time buyer’, which it says means they can’t ever have owned an interest in a residential property in the UK or abroad, including Buy to Let properties and any property that has been inherited, even if they’ve never lived there.

How much is the average first time buyer deposit?

According to Halifax, the average deposit first time buyers paid in 2024 was over £61,000.

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