Aldermore launches 100pc LTV mortgage

A family member will be asked to provide a guarantee secured against the residential property at least 25% the value of the property.

Charles Haresnape, managing director of residential mortgages at Aldermore, said: “Family support in the form of gifted deposits has become commonplace and is widely accepted by most lenders. The Aldermore family guarantee mortgage gives much greater flexibility, enabling guarantors to retain savings and instead provide a guarantee, requiring no cash deposit.

“We’ve carefully considered the needs of the guarantor, resulting in a guarantee that is capped at the originally agreed amount. The guarantee can also be repaid at any time, or released if the loan to value on the mortgaged property falls to 75% or lower.

“Perhaps most importantly, we’ve limited the guarantee period to just 10 years at which point it will expire, giving guarantors clarity as to how long their commitment will last.

Haresnape said that many first-time buyers had become disenfranchised from the housing market because of the large deposits demanded by most lenders.

“We believe this is the single biggest issue facing first-time buyers and it needs to be addressed head on if the UK’s housing market is to have a chance of recovery,” he added.

“Buying and setting up a first home is an expensive process, which puts enough strain on a first-time buyer’s finances without the additional pressure of needing to save a large deposit.

“Borrowers must be creditworthy and have sufficient income to comfortably afford their monthly mortgage repayments, with parents, step-parents or grandparents willing to provide a guarantee secured against their residential property.”