Posted on 17 January 2011 by
Housebuilder Barratt has teamed up with Hitachi Capital to offer parents a new way of helping their children get on to the property ladder.
The UK arm of the Japanese conglomerate is offering an unsecured loan to parents of first-time buyers purchasing a Barratt home to help them raise the high deposit mortgage lenders are currently demanding.
The buyer still needs to find 5% of the value of the property to put down, but their parents can borrow the equivalent of 15%, to give a total deposit of up to 20%.
Parents can borrow up to £50,000 over 12 years through the scheme, and they will be charged interest at a fixed rate of 5.4%. There are no early repayment charges and unlimited overpayments can be made at any time.
The maximum amount people can borrow through the scheme is significantly higher than the £25,000 that can be advanced through a personal loan.
The interest rate is also nearly 2% lower than the current best-buy personal loan rate, while it also compares well with long-term fixed rate mortgage deals.
The groups believe it is the first product of its kind to enable parents to raise large sums of money to help their children buy a property, without them having to remortgage or take out a second charge loan on their own home.
Copy from The Press Association.
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