The scheme, which is initially being marketed via Barratt Homes (including David Wilson Homes and Ward Homes), combines an Aldermore 80% LTV two-year fixed rate mortgage with up to a 15% LTV unsecured loan provided by Hitachi Capital (UK) PLC to cover part of the required deposit.
House buyers therefore only have to raise a 5% cash deposit of their own.
Charles Haresnape, managing director of Aldermore Residential Mortgages, said: “We are committed to helping struggling home-buyers find solutions to problems which continue to prevent them from owning property of their own.
“The single biggest issue holding back perfectly creditworthy house buyers is their inability to raise a sufficiently large deposit. Aldermore’s recently launched Family Guarantee Mortgage provides an option for borrowers seeking a 100% loan and this scheme gives those who can raise a 5% cash deposit yet another route to home ownership.
“We are providing would-be homeowners with choices, in a market where the options for those with less than a 25% deposit are few and far between.”
Gerald Grimes, managing director, Hitachi Capital (UK) PLC, said: “Would-be home buyers have become disheartened with the current housing market because of the large deposits demanded by a lot of lenders.
“Last year we teamed up with Barratt Homes to offer parents the opportunity to help their children onto the ladder; this year we are opening up this innovative product to the buyers directly.
“Initially this will be with Barratt Homes but we will be rolling it out through other house builders, such as Linden Homes, part of Galliford Try plc and Keepmoat Homes.
“If the housing market is to fully recover, the issue of deposits needs to be tackled head on. In light of this, I am delighted to be working with Barratt Homes as well as Aldermore to bring a pioneering new product to help stimulate the UK property market.”
Earlier this month Aldermore became the first national lender since the onset of the credit crunch to offer a 100% LTV mortgage underpinned by a parental guarantee.
Unlike most other lenders, Aldermore’s decision-making is not dependent on credit scoring but is based on sensible underwriting rules and criteria applied by experienced staff.
