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By putting a loved one’s cash savings in a secure savings account, you could get a mortgage for a home with as little as 0% deposit saved.
A Savings as Security mortgage, sometimes called a springboard or family guarantor mortgage, allows first-time buyers to purchase a home without any deposit savings.
Your family member or friend puts 10% of the full property value into a savings account with the mortgage lender. Their money is held for 5-years as security against your mortgage.
Providing you’ve made your monthly repayments with no issues, at the end of the mortgage term your loved one will get their money back, plus any interest that has built up.
All mortgages have risks and benefits. Here are some key factors you should know before applying for a Savings as Security mortgage.
Get on the ladder with no deposit
There is no minimum deposit requirement for a Savings as Security mortgage. Instead, the savings deposited by your guarantor will be used as security by the lender.
It’s a temporary form of support
If you can afford the mortgage by yourself when the 5-year product term ends, you can remortgage onto a new deal without your guarantor.
Your guarantor can support multiple buyers
Providing your guarantor has sufficient savings to do so, they can support multiple buyers. So, if you have siblings, a parent could support both of you at the same time.
Your guarantor’s savings could increase
Over the course of the 5-year product term, your guarantor’s savings will accumulate interest. So, providing the monthly mortgage repayments are made, it’s likely they’ll get more money back than they originally put in.
Your guarantor’s savings are at risk
Your family or friends are offering their Savings as Security against your mortgage. This means if you don’t keep up with your monthly repayments, guarantor might not get all of their savings back.
Your guarantor’s savings are not accessible
For that 5-year product term, your guarantor will not be able to access their savings. They must be comfortable that they won’t need the money in the short-term.
It could affect your guarantor’s affordability
If your guarantor wanted to take on another debt, acting as a guarantor could have a negative impact. Being a guarantor is a financial responsibility and the lender may take this into account when assessing their affordability for a new loan.
Your options for a mortgage are limited
Savings as Security mortgages are uncommon amongst lenders. This means there are fewer options to choose from, and you might pay a higher interest rate than if you took out a standard mortgage.
Get into your very own home in 4 simple steps
In under 10-minutes we’ll check your eligibility for a Savings as Security mortgage as well as our other buying schemes. Plus you’ll get a personalised mortgage recommendation including interest rates and repayments.
Book a call with our mortgage experts to complete the qualification process. We’ll cover any questions you might have about Savings as Security mortgages, and collect more information about your situation.
Your dedicated advisor will get a Decision in Principle from your chosen lender. Once you’ve had an offer accepted on a property, we’ll prepare and submit the mortgage application on your behalf.
During the conveyancing process, we’ll liaise with the developer or seller and your solicitors to ensure a smooth purchase. Your case manager will be on hand all the way through to move in day!
Explore our other buying schemes to discover alternative ways to buy.
On your own
Purchase a new build home from a participating home builder with just a 5% deposit.See details
With a guarantor
Add some or all of a guarantor’s earnings to your household income to boost your mortgage affordability.See details
Unlock a gifted deposit from a loved one’s property to create a house deposit from scratch or top up your existing deposit.See details
Confused about mortgages? Read our guides for expert tips on saving, buying and the market.
You can be snug in your very own home in 4 simple steps