£50,000 Loans to Parents for Barratt Home Deposit – a helping hand
To help parents get their children into a new home Barratt Home has launched a new scheme allowing parents to borrow up to £50,000 towards a deposit. The tie-up between the UK financial services arm of the multi-national Japanese conglomerate, Hitachi Capital (UK) PLC and Britain’s biggest housebuilder means that for the first time parents can borrow the money to help their children onto the property ladder without either having to re-mortgage or put a second charge on their own homes.
The product is the only one of its kind currently on the market and is specifically designed to address current mortgage restrictions. Significant numbers of creditworthy first-time buyers are largely dependent on parental support because they do not have the 20 or 25 per cent deposit which lenders now require. But many parents – who regard home ownership for their children as a sensible medium-term investment – are often reluctant to fund a deposit if any loan has to be secured against the principal family property.
Under the Hitachi Capital loan scheme, the typical buyer will only need to raise a deposit of five per cent. An 80 per cent mortgage is available from a number of High St lenders. And the remaining 15 per cent of the purchase price can be met through an unsecured loan from Hitachi Capital (UK) PLC to the buyer’s parents or legal guardian.
Hitachi Capital (UK) PLC is offering unsecured loans of up to £50,000 for a period of 12 years at a fixed rate of 5.4 per cent. There are no early repayment charges and unlimited overpayments are allowed at any time during the agreement without penalty. The average age of an unassisted First Time Buyer is now 37.
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