British retail bank Lloyds TSB has extended its 'Lend a Hand' mortgage deal to home movers, which was previously available only to first-time buyers.
According to the bank, with Lend a Hand, borrowers can take out a mortgage with a deposit of just 5%, but can access a rate that is the equivalent of products available for borrowers with a significantly bigger down-payment. However, their funds have to be backed up with the savings of helper, such as a parent, grandparent or other family member.
Lloyds TSB said that no other major lender offers deals for new customers moving house unless they have a deposit of at least 10%. Product pricing can also be expensive at this level. The lowest rate on the market for those with a 10% deposit is 5.99%.
With Lend a Hand, borrowers can get rates from 4.79% with a GBP895 fee, even if they have a 5% deposit. At the same time, their helper will benefit from a competitive savings rate (currently 3.75% AER Gross), as a legal charge is taken over the savings to offset the risk.
Stephen Noakes, commercial director of mortgages at Lloyds TSB, said: “The Lend a Hand mortgage has been a very successful way for people to take their first steps in the housing market. It’s great news that it can now support those that are looking to move up the ladder too.
“The product retains all of the features that make it so unique, borrowers can move with just a 5% deposit but without the high price tag that it would normally bring. At the same time, their family can provide their support and benefit from a competitive savings rate.”