The Family Building Society launched on July 14, aiming to help families “across the generations” with its new range of products.
The new mutual firm is the first building society to launch in the UK in three decades, and is an arm of the National Counties Building Society.
Under its key product, the Family Mortgage, a parent, grandparent or other relative can have:
- an interest-paying savings account where the deposit provides security for the mortgage so that the mortgage holder pays a lower rate; and/or
- an offsetting arrangement where the family member foregoes interest on savings so that the mortgage holder pays a lower overall rate of interest and no interest on the offset amount; and/or
- a charge on a parent or other family member’s house to help reduce the need for a larger deposit
- a built-in protection feature so that if the mortgage holder loses their job through no fault of their own, their share of the mortgage will be paid for up to six months
The society is also offering a new Low Start mortgage to help people who have gone through a life-changing event such as divorce which reduces their income. Its five-year term follows five steps:
- for the first six months the rate is fixed at 1.39 per cent and is interest only,
- payments for months 7 to 12 are also interest only with the rate fixed at 2.69 per cent,
- for the second year the payments are still interest only, yet fixed at 5.39 per cent,
- and move to repayment of interest and capital for the third to fifth years,
- before moving to a variable rate of 4.79 per cent for the remainder of the term.
The combination of low rates in the first year with no capital repayments for the first two years is deliberately designed to keep payments low as borrowers adjust to their new financial circumstances.
Other products include mortgages for young people, savings products that help towards the mortgage arrangement fee for first-time buyers, motor insurance, equity release, care fees planning and assisted home sales.
A video explaining the Family Building Society can be viewed at familybuildingsociety.co.uk.
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