The deals are aimed at first-time buyers whose application is being supported by their parents.
The First Start mortgage is a joint mortgage between parents (or step-parents) and children, using the parents’ income to enhance their borrowing capacity for the mortgage.
Borrowers have a choice of two rates fixed for 33 months until 31 December 2008: either 5.09 per cent up to a maximum 95 per cent LTV, or 5.39 per cent up to 100 per cent LTV. There is a £399 admin fee and early redemption charge of three per cent of the amount repaid during the fixed period. Both fixed rates come with the facility for borrowers to overpay by up to 10 per cent. The maximum loan is £999,999 and there is no Higher Lending Charge.
Justine Tomlinson, marketing director at Mortgage Next, said: “The First Start product is an excellent option for first-time buyers who are struggling to get on the housing ladder. It not only enables them to get much needed help from parents with income multiples, but also gives the comfort of a fixed rate for nearly three years.
“Fixed rates are particularly popular with firsttime buyers as they help with budgeting and, with the 5.39 per cent deal, borrowers can also take a 100 per cent loan and therefore don’t need to save for a deposit.”
