First-time buyers are having to resort to increasingly complex mortgages as banks have become reluctant to offer loans to customers with smaller deposits. In the case of a joint borrower, sole proprietor loan, a parent contributes to monthly repayments but they are not named on the property deeds. In other cases parents can act as a guarantor to allow their children to take out a loan. Another option is a family offset mortgage, where the parent places cash into a linked savings account, reducing the interest charged to their children. It comes as Barclays is now the only big lender still offering Bank of Mum and Dad-style mortgages. Andrew Montlake, managing director of mortgage broker Coreco, said that banks are nervous of people relying on parental support to pay the mortgage.
The Sunday Telegraph (16/08/2020) The Sunday Times (16/08/2020)