There are plenty of barriers when it comes to getting on the property market these days, not least the ever-growing demand for deposits. The family boost mortgages were launched by Halifax to try and help, although you’re going to need to ask the bank of mum and dad for a pretty hefty hand.

What is a mortgage

Taking it back to basics, a mortgage is a loan taken out to buy a property or area of land. By getting a mortgage, you’re borrowing the value of the property, which you then pay back to the bank with interest through monthly instalments. In order to get a mortgage, amongst credit check and other financial assessments, you will normally be required to put down a deposit of at least 5% of the property value.

How does the Family Boost Mortgage Work?

The main feature which differentiates the Family Boost Mortgage from its competitors is that there is no need for an upfront deposit. Designed for first-time buyers, this allows you to borrow 100% of the purchase price of a property with a fixed 2.9% interest rate.

Instead, Halifax is asking for a member of the borrower’s family to deposit 10% of the property purchase price into a Halifax savings account with a 2.5% interest rate. Those savings will be used as a security to the mortgage, and provided the borrowers keep up with those monthly repayments, the savings will be returned with the interest gained after three years. That money cannot be accessed during that three year period however, and that money could be at risk if the mortgage payments aren’t made.

This scheme cannot be used to buy new-build or self-build properties- so those Grand Designs dreams may need to be put on hold! Similarly, the family boost mortgages cannot be used in conjunction with shared equity, shared ownership, Right to Buy schemes or Help to Buy.

Who is the Family Boost Mortgage best for?

As mentioned above, this mortgage scheme is designed for first time buyers and those who aren’t looking to buy a new build property. Saving up for a deposit can be a challenging barrier for those looking to buy a property, so this might be an attractive option for those who have high outgoings. That being said, as with any mortgage, it’s important you meet those monthly repayments- especially if you have thousands of pounds of your parents’ savings on the line!If you’re looking to buy your first property and have parents willing to lend a hand, this mortgage could be suitable for you!