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Family Springboard Mortgage

Introduction to the Family Springboard Mortgage

What is a Springboard Mortgage?

A springboard mortgage is designed to assist first-time buyers who are having difficulty saving for a deposit. Instead of providing a deposit themselves, a family member uses their savings as security for the property. Although Barclays offers the Family Springboard Mortgage, other similar products exist, including:

  • Family Boost Mortgages (Halifax)
  • Family Deposit Mortgages (Nationwide)
  • Lend a Hand Mortgages (Lloyds Bank)

These options function similarly and are a type of guarantor mortgage, where a family member or loved one helps you secure your first mortgage.

How Do Springboard Mortgages Work?

In a springboard mortgage, a family member uses their savings as the deposit for your mortgage. Instead of going towards the property’s purchase, the money is placed into a savings account with the lender. The family member must provide at least 10% of the property’s value, which is held for a specified period, usually five years. During this time, no money can be added or withdrawn from the account.

At the end of the term, the family member gets their money back with interest, assuming you maintain your repayments. They will not own any part of the property, nor will their name appear on the title deeds.

What Happens if I Default on My Mortgage?

If you miss mortgage payments, the lender might retain the savings for longer than the agreed term. In the event of repossession, the family member could lose some or all of their money. Therefore, lenders often recommend that family members seek independent legal advice before agreeing to a springboard mortgage.

Which Family Members Can Help?

Any family member can assist with a springboard mortgage. Common participants include parents, grandparents, and guardians, but siblings, aunts, uncles, or even children can also help. Some lenders permit friends to participate, provided they are aware of the associated risks.

Are Springboard Mortgages a Good Idea?

A springboard mortgage can be a beneficial way to purchase your first home, provided you have a family member willing and able to assist. However, it’s important to weigh the pros and cons before applying. Both you and the assisting family member should carefully consider all aspects of this type of mortgage.

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