Lloyds launches first-time buyer mortgage
Lloyds TSB has launched a new mortgage for first time buyers, which means they can borrow up to 95 per cent of their property's value.
The "Lend a Hand" mortgage, which has a rate of 4.39 per cent, works by taking a deposit from the buyers, then taking an additional deposit from their parents, which will sit in a special Lloyds savings account.
Lloyds will take legal charge of the savings account, which will earn an interest rate of 3.5 per cent for 42 months.
It means the parents have ownership of their savings but will be able to use it to help guarantee their son or daughter's house purchase.
Stephen Noakes, commercial director of mortgages at Llloyds, said: "Market conditions mean virtually no 95 per cent mortgages are available at the moment, while the few that are come at a high price with stringent credit requirements.
"The legal charge on the parents' savings account means we can offset the risk of lending at this level to offer a realistic and affordable option for first time buyers."
The mortgage comes with a fee, which is £995 for a £95,000 mortgage.
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