First-time buyers struggling to save enough to get onto the property ladder may be able to take advantage of a new loan scheme to enable them to ‘triple their deposit’.
The interest-free equity loan has been launched by a business called Even, which aims to find solutions for first-time buyers. It is being described as an alternative to Help to Buy.
However, unlike the government scheme, which provides a 20% loan for first-time buyers to use as a deposit for a new build home, Even’s offering can be used for pre-owned homes.
Borrowers who already have a 5% deposit can use the equity loan to boost their deposit and purchase a first home.
They can apply for a loan of up to two times their deposit and instead of paying interest, Even shares the increase or decrease in the price of the property at the point of repayment, either through sale, or in smaller chunks.
At present first-time buyers can access the equity loan in combination with a mortgage from lender, Kensington. It is the first lender, so far, to offer this.
Craig McKinlay, new business development director at Kensington, said: “[This] innovative solution to help generation rent get on the housing ladder fits perfectly with Kensington’s goal as a specialist lender to help those who struggle to get a mortgage from mainstream lenders”
Even said it hoped its product would help those with no access to buy, for example people without access to the bank of mum and dad.
James Turford, co-founder of Even and COO, said: “Our company mission is to help end generation rent, and we’ve been working on the Even equity loan for two years as the first step toward that goal.
“Today, we’re delighted to launch our innovative product with Kensington, opening the door to a whole generation of homeowners, helping them get onto the property ladder sooner.”
