Mortgage Express, the specialist lending arm of Bradford & Bingley, is offering multiples of up to five times borrowers’ salaries as part of its new shared appreciation product.
The product is aimed at first time buyers and divorcees who may struggle to afford property and offers 100% loans only. Borrowers will have to pay interest on 70% of the amount borrowed, but Mortgage Express will take a share of any appreciating value in the house.
Mortgage Express will retrieve its share of the equity in the property on the tenth anniversary of the loan, or when the property is sold or remortgaged prior to that. Mortgage Express will keep the first 2% of any appreciation, and then 30% of further appreciation up to 12%. Any appreciation beyond 12% remains with the borrower in full.
The product is being piloted with B&B subsidiaries The MarketPlace and Charcol. David Bitner, head of product operations at The MarketPlace, said: ‘It is an advice-led product that maximises income power while managing monthly affordability. It will not be the answer for all borrowers, but it could make the difference for some people who require a structured, means of borrowing to increase their purchasing power.’