Saffron Building Society has announced the launch of a new mortgage designed to help second and subsequent time buyers struggling to raise a deposit, take their next step on the housing ladder.
The Next Step Mortgage, which is available via Saffron For Intermediaries, has the following features:
- Available up to 95% LTV
- 5.99% rate fixed to 31/8/16
- No early repayment charges
- For house purchases up to £500,000
- £495 arrangement fee
- Also available to third, fourth and subsequent time movers
Peter Izard, Head of Mortgages at Saffron Building Society said:
“Many second-steppers are being held-back from moving up the mortgage ladder because of difficulties raising a sufficiently large deposit. Our Next Step mortgage not only reduces the deposit requirement to just 5%, but it also offers a rate of 5.99% fixed to the end of August 2016 with no early redemption charges. This product should help unblock the log-jam building in the market and enable more people to make their next move.”
The Next Step Mortgage is being marketed via a panel of distributors which includes 3mc, AToM, Brightstar, Complete FS, L&G Network and Platinum Options. Brokers requiring further information about the new product range should, in the first instance, contact any of these distributors.
Dale Jannels, Managing Director of AToM, said:
“The Next Step Mortgage is a much needed addition to a housing market which is being held-back because of borrowers inability to raise sufficiently large deposits. This product offers a very practical solution to that problem and I particularly like features such as no early repayment charges.”
The average age of a second stepper is now 41 and the average deposit required in 2012 was £58,836. The average second stepper has just £40,000 equity in their current property and almost a third have less than £20,000, meaning that 61% of would be second steppers are unable to move*.
The government recently announced the Help to Buy scheme as part of its spring budget, which includes the provision of support for second steppers. The scheme also includes a government backed mortgage guarantee, to encourage lenders to offer higher LTV loans. However, this facility will not be available until January 2014.
Saffron For Intermediaries is the specialist intermediary lending channel of the Saffron Building Society, which markets a range of Special Situations mortgages designed for creditworthy borrowers being frustrated in their efforts to find a suitable mortgage via other lenders.
The Special Situations range includes mortgages for first-time buyers, next steppers, the self-employed, property investors and landlords refurbishing property, self builders, borrowers wishing to repair an adverse credit record, contractors and professionals.
Saffron For Intermediaries also has products for Everyday Situations, which cater for borrowers seeking straightforward and competitively priced mortgages.