Saffron Building Society has launched a mortgage designed to help homeowners struggling to raise a deposit, take their next step on the housing ladder.
The Next Step Mortgage, which is available via Saffron For Intermediaries, requires only a 5 per cent deposit.
The rate is fixed at 5.99 per cent until 31/8/16 for house purchases up to £500,000 with a £495 arrangement fee and there are no early repayment charges
Peter Izard, head of mortgages at Saffron Building Society, said: “Many second-steppers are being held-back from moving up the mortgage ladder because of difficulties raising a sufficiently large deposit. This product should help unblock the log-jam building in the market and enable more people to make their next move.”
Dale Jannels, managing director of mortgage brokerage AToM, said: “The Next Step Mortgage is a much needed addition to a housing market which is being held-back because of borrowers inability to raise sufficiently large deposits. This product offers a very practical solution to that problem and I particularly like features such as no early repayment charges.”
The average age of a second stepper is now 41 and the average deposit in 2012 was £58,836, according to ‘Second Steppers: Trapped in first home’ published by Lloyds TSB.
In addition, the report said that the average second stepper has £40,000 equity in their current property and almost a third have less than £20,000, meaning that 61 per cent of would be second steppers are unable to move.
Saffron For Intermediaries is the specialist intermediary lending channel of the Saffron Building Society, which markets a range of Special Situations mortgages designed for creditworthy borrowers.
The Special Situations range includes mortgages for first-time buyers, next steppers, the self-employed, property investors and landlords refurbishing property, self builders, borrowers wishing to repair an adverse credit record, contractors and professionals.
Saffron For Intermediaries also has products for Everyday Situations, which cater for borrowers seeking straightforward and competitively priced mortgages.
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