Post Office Launches New Mortgage Scheme That Doesn't Require A Deposit

For many young people the idea of becoming a homeowner in their 20s is a distant dream; with house prices high, wages low and the chance of saving a deposit near impossible, unless you fancy living off beans and toast for the foreseeable future.

However, the Post Office has launched a new scheme for first-time buyers which means you could yourself on the property ladder without needing a deposit.

For people who can afford to make the payments on a mortgage but are still struggling to scrape together a deposit, the 'Family Link' mortgage offers buyers the chance to borrow 90 percent of a house's value with the remaining 10 percent secured against the home of a close relative (parents, step-parents, brothers, sisters and step-brothers and step-sisters) - assuming their property is mortgage free.

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An example the Post Office uses on its site explains that if you wanted to buy a £200,000 - a £20,000 mortgage would be taken against your parent (or close relative's) property, making up your 10 percent deposit. The Post Office would then loan you the remaining £180,000. The £20,000 would need to be paid back in the first five years, while the remaining £180,000 would be paid back on a term that works for you, up to 35 years.

Obviously, there's a couple of catches here - your parents might not own their own home mortgage-free or they might not want to put their property up as a deposit, which is also fair enough.

However, assuming they're OK to do it, and you're earning the UK average salary of £26,000 the Sun's money experts reckon you could get a loan to cover the cost of a £120,000 property as mortgage providers generally offer a maximum loan of four and a half times your salary.

Clearly, where you live is going to make a massive difference here - if you live in London, you could probably find yourself a little shed somewhere for £120K but if you lived in Newcastle, for example, you could get a decent three-bedroom terraced for £119,950.

Not bad.

To find out more about the Family Link mortgage you can check out the Post Office's website here.

Featured Image Credit: PA

Topics: uk news

Claire Reid

Claire is a journalist at LADbible who, after dossing around for a few years, went to Liverpool John Moores University. She graduated with a degree in Journalism and a whole load of debt. When not writing words in exchange for money she is usually at home watching serial killer documentaries surrounded by cats. You can contact Claire at [email protected]

@ClaireReid19