A mortgage that enables families to raise funds from their existing property to help relatives buy a home has been launched by Nationwide.
The family deposit mortgage is available to family members who want to help their children onto the property ladder, as well as home movers and those wishing to help older parents to move.
New borrowers can choose from a two-year fixed rate, five-year fixed rate and two-year tracker rate mortgage deals with a £999 fee or no fee, available direct from Nationwide or through brokers.
Rates start at 1.15 per cent for the two-year tracker and 1.2 per cent for the two-year fixed rate, both with a £999 fee - a discount of 0.09 per cent on the core product range.
Existing Nationwide mortgage members and those remortgaging to the building society from another lender can apply for the Family Deposit Mortgage, on condition that the buyer receiving the funds takes out a loan from the building society’s standard mortgage range.
All of the additional sum raised must be provided as a fully gifted deposit, with those gifting the money able to access up to a total mortgage borrowing of 80 per cent loan-to-value.
The scheme is also open to those with no current mortgage on their homes and those in receipt of retirement income.
With the average first-time buyer deposit currently stood at £28,200 in the UK as a whole and £65,600 in London, the product will help the growing number of buyers relying on other family members for assistance when purchasing a property.
Nationwide’s head of mortgages Henry Jordan said: “Our Family Deposit Mortgage range has been launched in recognition of customer demand for a flexible and accessible way to use the wealth tied up in people’s homes.
"The aim is to help not only first-time buyers but also home movers to secure their own property.
"We know that trying to raise a deposit can be the most significant barrier to becoming a home owner.
"This Nationwide range will enable families to give mutual support to each other and provide new options for home ownership.”
Tony Salentino, director at Southampton-based Complete FS, said: “Anything that helps first-time buyers get on the property ladder is a good thing.
“We have a nation now of people in their 50s that have high equity and good assets, but their poor kids can’t even get on the ladder - so anything ‘out of the box’ has to be encouraged.
“We need to get away from the old style of thinking about deposits. We are in a different world now and have to think outside the box.”