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Scottish Widows launches key worker mortgage

21 August, 2007

The product, which will offer an alternative to the Government’s Open Market Homebuy scheme, will give Key Workers the opportunity to buy their own home outright, rather than just part owning it. It will also offer homebuyers the choice to buy with 102% (Loan to Value), which will help those who find it difficult to save for a deposit.

Product details:

• Maximum LTV 102%
• 100% ownership
• Minimum age is 21 years old, maximum is 40 years old
• Available for first time buyers and people upsizing/remortgaging
• Flexible underwriting – taking long-term overtime and shift allowances into account
• Choice of rates available including 2,3 and 5 year fixed, stepped fixed rates and a base rate tracker
• Offset facility available

The Bank will offer enhanced income multipliers of up to 5x salary for a single applicant and 5x + 1 or 4.5x joint salaries. This is designed to help bridge the gap between average house prices and earnings ratio for the Key Workers sector, which has increased rapidly over the last five years.

Richard Clark, head of product development and marketing at Scottish Widows Bank, said: “Getting onto the property ladder is an uphill struggle for first-time buyers and it isn’t getting any easier, particularly for Key Workers who often don’t earn enough to even contemplate being able to buy close to the area where they work.

We have launched this product to offer these individuals an alternative to the existing Government scheme. With the Government recently announcing that they will not be putting any new money into the Open Market Homebuy scheme, we believe that our product will offer a genuine solution for Key Workers, including the opportunity to own 100% of their property.

“We are confident that we have developed a flexible solution that will give first-time buyers the helping hand they need.”