Lloyds Bank has launched a 100 per cent loan-to-value (LTV) mortgage product linked to a savings account in a bid to support more first-time buyers getting a foot on the property ladder.
The so-called Lend a Hand mortgage was launched following research from the lender that revealed purchasing a home was among the top life goals for millennials, with 43 per cent of respondents labelling it as the top goal. Despite this, half those surveyed said saving for a deposit was the largest obstacle.
The research found that more than 40 per cent of parents would like to help their children financially, but are concerned that they will need the money in later life.
The product from Lloyds removes the need for a deposit from the first-time buyer and allows a family member to instead provide up to 10 per cent of the loan in savings, to be used as security.
The mortgage is fixed for three-years with rates starting at 2.99 per cent, with the maximum term for the product being 30 years. The bank has said it will lend up to a maximum of £50,000. Alongside the mortgage is a savings account, offering a rate of 2.5 per cent, which is also fixed for three-years.
Commenting on the product, Lloyds Bank retail group director Vim Maru said: “We are committed to lending £30billion to first-time buyers by 2020 as part of our pledge to help people and communities across Britain prosper – and Lend a Hand is one of the ways we will do this.
“At the heart of this market-leading product is helping to address the biggest challenge first-time buyers face getting on to the property ladder, while rewarding loyal customers in a low rate environment.
“Although times have changed, children still have a similar ambition to their parents – to own their own home. Lend a Hand helps parents to invest in their children’s future and get the best return on their cash."
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