Barclays Mortgages has extended the fixed rate period for its Springboard Mortgage from three years to five, with the term extending from 25 to 35 years.
The mortgage was launched back in 2013 and removes the need for a deposit from first-time buyers with a 10% contribution required from a relative or guardian instead.
Hannah Bernard, head of Barclays Mortgages, said: “Since the launch of our Family Springboard Mortgage in 2013, we’ve been leading the way in offering more people the opportunity to step onto the property ladder earlier than they might have been able to previously.
“Barclays’ own research has shown that many first-time buyers view the money for a deposit as a ‘gift’ that doesn’t need to be paid back, therefore placing a significant levy on the Bank of Mum and Dad.
“The Family Springboard mortgage has been specifically designed to remove the financial burden from parents and to ensure they receive their deposit with interest at the end of the 5-year fixed-rate period.”
Instead of gifting the deposit, the family helper opens a Helpful Start account linked to the mortgage into which they deposit savings which are equal to 10% of the final price of the house.
After five years the money in the account is returned to the family helper with interest.
The interest rate on the Helpful Start account tracks a margin of 1.50% above the Bank of England base rate.