It aims to provide a tailored solution for people who require help in affording a property to suit their needs.
David Bitner, head of product operations at The MarketPlace, comments: “We recognise that at varying stages in people’s lives they can struggle to afford the property they need. Whether it’s first time buyers or key workers trying to get on the property ladder, divorcees starting out again, or growing families needing more space, it’s important to find solutions which make it possible for these people to buy a suitable home. There are already some specialist products out in the market catering to this section of borrowers, and the new Step Ladder mortgage joins these as a new type of tailored solution. It’s an advice-led product that maximises income power while managing monthly affordability. It won’t be the answer for all borrowers, but it could make the difference for some people who require a structured means of borrowing to increase their purchasing power.”
The Step Ladder Shared Equity Appreciation Mortgage – key points:
First 2% per annum of growth in property value Next 10% per annum of growth in property value Anything over 12% per annum growth
Mortgage Express keeps 100% Mortgage Express keeps 30%. Borrower keeps 70% Borrower keeps 100%
Andrew Moss, Product Development Manager at Mortgage Express, says ‘Step Ladder is specifically tailored for people who have found that 100% loans don’t help with their situation, but very much want to buy their own home rather than rent.’
For example, a recent divorcee with children whose property requirements and financial circumstances have changed, earning £30,000 per annum would normally be able to purchase a home worth a maximum of £114,000 on a 100% mortgage – based on the most generous income multiple of 3.8 x income. With this shared equity appreciation mortgage, borrowers can secure a property worth up to £150,000.
Bitner continues: “Even people earning above-average salaries can often struggle to afford the property they need. The Step Ladder Mortgage is an advice led product which gives a formalised mortgage solution to what is an increasingly common problem. Adding a few thousand pounds to the amount that can be borrowed can make all the difference – a better area, an extra bedroom or just the first step on the ladder.”
Step Ladder is the latest in a line of specialist mortgages developed by Mortgage Express, including Buy-To-Let for limited companies and a true self cert product.