100 per cent loans for Channel Islands

Called the Next Generation Mortgage, the new service overcomes an increasing problem for today’s first and second time buyers, funding their deposit.

Buyers will need to enlist the support of a family member who is prepared to help them to get on or move up the property ladder. The buyer’s guarantor deposits a sum of up to 15% of the purchase price into a deposit account with Skipton International, which attracts a variable rate of credit interest, currently 2.00% gross/AER. No further deposits or withdrawals are allowed, but interest can be paid away to a third party account to create an income. So for retired parents, a regular income can still be derived from their capital whilst helping a son or daughter to buy their own home.

The advantage of this approach is that the guarantor does not have to give or lend any funds to the house buyer, but instead they retain ownership of the deposit at all times and of course benefit from the interest income available.

The Next Generation mortgage can also be built around a charge taken against an existing property which might be the family home, for example. Again, the charge will be limited to a maximum of 15% of the purchase price, depending upon how much more funding is required.

Currently, house buyers opting for the Next Generation mortgage package can borrow funds at a rate of 5.49% fixed for two years, with a 0.75% administration fee.

Commenting on the new mortgage product, Nigel Pascoe, director of lending, Skipton International said, “This new account opens the door for first time buyers and those who might be struggling to raise their deposit from their own means, but importantly does not necessarily require a third party to donate or lend funds.”