How Parents Can Help Their Kids Get on Property Ladder

For all those parents looking for a way to assist their children in getting on the property ladder but don’t want to part with a cash lump sum, the Post Office may have the answer.


The Post Office have introduced a mortgage that will allow First Time Buyers to be able to secure a loan up to the value of 10% against their parents’ property. The loan will then be required to be paid over 5 years.


The 90 percent loan to value (LTV) mortgage, known as a ‘Family Link’ mortgage will be available with the 10 percent deposit being secured against their parents’ home as long as their home is already mortgage free.


Rates begin at 4.89 percent for a fixed 5-year deal and the repayments will be made separately throughout the first five years. The repayment on the ‘parents’’ mortgage is interest free over the 5 years whereas interest is charged on their own mortgage.


Although it is a great way of assisting first-time buying family members, it isn’t without risk. Should you new mortgagees fall behind on repayments, both of the homes could be at risk of repossession.


When it comes to the application, the borrowers will be able to apply for the mortgage with a close relative such as parents or step-parents to assist in applying for a greater loan. Both of the incomes will be taken into account when the Post Office make an assessment for lending.


If you’re interested in this type of mortgage why not find out more by talking to a Financial Adviser on 03333 44 85 11 or complete the form below and we’ll be in touch as soon as we can.



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