No deposit. No problem. Post Office Family Link For first time buyers who haven t saved for a deposit but have good affordability.
Helping you get your first home How does it work? If you have a good income but haven't saved a deposit, Post Office Family Link could help you buy your own home. It works by letting your parents or close relatives help financially, without needing to dip into their savings, or gift a cash deposit. Post Office Family Link is made up of two loans: 1. A mortgage for 90% of the value of the home you re buying, this is known as the loan to value (LTV). Now Loan 1 1. First time buyer You take a 90% LTV mortagage against the property you re buying. Loan 2 2. Assistor You then secure the remaining 10% against your assistor s mortgage free home. 2. A mortgage for the remaining 10% that you and your parent or close relative (assistor) secure against their mortgage free home. This is interest free and must be repaid over five years. For example: 200,000 180,000 If you re looking to buy a home worth 200,000, you ll take out a mortgage of 180,000 against the home you are buying. Then, with your assistor, you'll take another mortgage of 20,000 the remaining 10%. This second mortgage is secured against the assistor's mortgage free home. 20,000 Year 5 Loan 1 1. First time buyer Loan 2 2. Assistor You will have paid off five years worth of repayments on your 90% LTV loan. You will have paid off the assistor loan. Plus as long as house prices don t fall you will have reduced the size of your loan compared to the value of your home.
Who's it for? How does it help? Post Office Family Link could be right for you if you could afford the monthly repayments on your first home, but you re struggling to save for a deposit. You'll need to have a parent or close relative who s mortgage free and wants to help you get on the property ladder. You'll also need to be: 18 years old or above Earning 20,000 or more Borrowing 500,000 or less On your own, or with one other person, buying your first home. You can t own any other property when you take out this mortgage. It s only for buying your first home and must be on a repayment basis. To be considered a first time buyer, you or the person you are buying your home with, must never have owned a residential property and you must occupy the property as your main residence. Your assistor needs to be: An owner of a mortgage free property worth 150,000 or more Under 75 years old at the end of the assistor loan Earning an income of 20,000 or more On their own, or helping with another person such as a partner. We call the person, or people, helping you to buy assistors. This is a close relative, a parent, step parent, brother, sister, stepbrother, or stepsister of anyone applying for the mortgage. What s in it for me? The main benefit of Post Office Family Link is that you can get on the property ladder sooner, as you don t need to save for a deposit. On top of this, you could also benefit from: Paying off the assistor loan while living in your home interest free for five years Being in a stronger financial position in five years by this time you ll have paid off the 10% assistor loan as well as five years worth of your 90% LTV mortgage repayments Reviewing your options after five years you could do nothing, find a new deal from another lender, or switch to a new deal with us. Staying with us could save you time and money, as our existing customers don t pay any legal or valuation fees and there are no application forms to complete. You ll be responsible for making repayments on both loans and we make checks to be sure you can pay back the whole amount. If your assistors would prefer to, they can make payments on the 10% loan from their own account, Post Office Family Link offers them the flexibility to do this. What s in it for my assistor? A big plus for your assistor is it allows them to help you without gifting a cash deposit. To make this easier, they'll get: Free valuation the assistor won t have to pay for their house to be valued No stamp duty costs as your assistor does not have any claim on your property. Please bear in mind, if you default, your assistor will be liable for the mortgage secured against their home.
Post Office Family Link in numbers Jane & Frank s first home in South East England 405,000 cost of their new house Jo s first home in Wales 150,000 cost of her new flat Peter s first home in Scotland 200,000 cost of his new cottage Susie and Duncan s first home in the Midlands 290,000 cost of their new house 90% LTV MORTGAGE 364,500 135,000 180,000 261,000 10% ASSISTOR MORTGAGE 40,500 15,000 20,000 29,000 YOUR INCOME(S) 81,500 31,000 49,000 58,500 MONTHLY REPAYMENTS FOR 90% LTV MORTGAGE MONTHLY REPAYMENTS FOR 10% ASSISTOR MORTGAGE 1,957 725 966 1,401 675 250 333 483 TOTAL MONTHLY PAYMENT 2,632 975 1,299 1,884 The amount you can borrow, and your monthly repayments, will depend on your circumstances. In the examples we ve given, the mortgage is based on a 30 year loan at a fixed rate of 5%. The assistor loan is a five year loan at a rate of 0%. Will you have to pay anything else? It depends on the mortgage you re taking out, but here's some costs you may need to consider: Before we transfer your mortgage funds you may need to pay a lending fee, funds transfer fee, legal fee, re-inspection fee and valuation fee. If you repay all or part of your 90% LTV mortgage before the five years is up, we may charge you an early repayment fee. If the home you re buying is worth less than 500,000 you won t pay Stamp Duty on the first 300,000. But you will pay 5% Stamp Duty on the remaining 200,000. MONTHLY PAYMENT AFTER 5 YEARS* *Based on a standard variable rate (SVR) of 4.49% 1,859 689 918 1,331 Paying back the mortgages Post Office Family Link mortgages are fixed for five years. This means you ll have a fixed monthly repayment for the first five years of the mortgage. During this time you can overpay up to 10% of your 90% LTV loan with no additional fees or costs. You can pay off the assistor loan at any time without being charged any early repayment fees. Should you be in a position to repay your 90% LTV mortgage in full, you'll also need to repay the assistor loan in full at the same time. This is a condition of the mortgage.
Ownership and legal advice With Post Office Family Link your assistor will not own, or have any claim, on the home you are buying. Equally, you will not own the assistor s home. As the first time buyer(s) you cannot have previously owned a residential property. And you must occupy this property as your main residence. The assistor is a close relative, a parent, step parent, brother, sister, stepbrother, or stepsister of any applicant. You and your assistor will need to use the same conveyancing solicitor for both mortgages. This is to make sure the mortgages complete simultaneously and the deposit from the 10% mortgage can be used to complete your purchase. The assistor must take independent legal advice before completion. We highly recommend the first time buyer(s) also take independent legal advice before deciding Post Office Family Link is right for you. The solicitor giving independent legal advice cannot be involved in the purchase of the property and they must have equal standing to the solicitor overseeing the conveyancing work. Don t worry, your solicitor will be able to help you with this. As part of the conditions of Post Office Family Link, you are responsible for the mortgage taken out against your new home as well as the assistor mortgage. If you default, the assistor will be liable for the mortgage secured against their home. This is known as having joint and individual liability. Speak to your broker today to find out how you can get on the property ladder with Post Office Family Link. Together, we make it happen. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE Post Office Money Mortgages are provided by Bank of Ireland (UK) plc. Bank of Ireland UK is a trading name of Bank of Ireland (UK) plc which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England & Wales. Registered Number: 7022885. Registered Office: Bow Bells House, 1 Bread Street, London, EC4M 9BE. Post Office Money and the Post Office Money logo are registered trademarks of Post Office Limited. F0134 0518 BIM0355 MA044 12404180521