First-time buyers are continuing to find it difficult to step onto the property ladder. According to the Council of Mortgage Lenders only 25,920 first-time buyers entered the market in January 2004, dropping from 28,160 in comparison to the same month last year.1
In response Newcastle Building Society has launched a fixed rate offset mortgage specifically to help first-time buyers get on the property ladder.
The new fixed rate Guaranteed Offset mortgage has been designed for first-time buyers whose parents wish to offer financial support by linking a savings deposit to their child’s mortgage for five years. In this way they can help their offspring purchase a more expensive property than they would normally qualify for, and use their savings in a tax-efficient way. At the same time the parent, or relative, retain their funds at the end of the five years.
The Guaranteed Offset mortgage offers a fixed rate of 5.40% for five years and has no completion fees.
Robert Hollinshead, Newcastle Building Society chief executive, comments: “We understand the problems facing first-time buyers, and that many parents, or family members, are desperately keen to help out. Offering cash is one way of doing this, but parents often tell us they would prefer to retain control of their money and to use it in a more tax-efficient way. This is precisely why we have developed the Guaranteed Offset mortgage. Borrowers and savers want products that really do make the best use of their money. We believe this new product addresses these needs.”
