The three year product, called ‘Lend a Hand', offers first time buyers a 95% loan to value mortgage, at 4.99%, by taking a legal charge on a savings account belonging to their parents. Parents retain ownership of their savings while earning a competitive fixed interest rate of 4.00% and, at the end of three years, their savings are returned.
Nearly half (49%) of parents surveyed said they were more likely to provide financial assistance if their children could secure a mortgage that allowed their savings to be returned with interest. And of these, 50% said such a mortgage would let them recycle their savings to help their other children.
Stephen Noakes commercial director of mortgages, Lloyds TSB, said, "Lloyds TSB's Lend a Hand mortgage lets parents use their savings without actually having to write their children the cheque. Their deposit is held in a savings account paying a competitive rate of interest and, after three years, they are free to use their savings again as they wish, maybe to help their next child buy their first home."