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Metro Bank launches multi-generational mortgage deals

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  • 25/04/2016
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Metro Bank launches multi-generational mortgage deals
Metro Bank is partnering wealth management firm St James’s Place to offer a range of mortgages designed for parents and grandparents to support offspring to buy a home.

The Intergenerational Mortgage Range, which is available to first-time buyers and homemovers, allows families three options; gifting, providing extra mortgage security and joint applications.

For families preferring not to gift, a secured deposit account is available, allowing them to contribute toward a deposit for their relative’s house.

The joint application feature does not require the parents or grandparents to be registered on the property deeds, meaning that homebuyers can avoid exposure to the 3% Stamp Duty premium and other tax implications associated with purchasing a second home.

Craig Donaldson, chief executive at Metro Bank, said: “Accessibility to the property market is a major challenge for young people and we understand their family’s desire to support them.”

The loans, which are for purchase only, allow a minimum loan size of £100,000 to a maximum of £600,000 on a property ranging from £150,000 to £1,500,000 in value.

Deals include two, three and five-year fixed rates as well as a two-year tracker rate which allow buyers to borrow a maximum of 85% of the value of their purchase, after the amount gifted or held in the secured deposit account is included.

Rates start at 1.99% for a two-year fix at 75% loan-to-value (LTV) and range to 2.89% for a five-year fix at 85% LTV, with a revert rate of 4% once the introductory term ends. The deals allow for a 20% annual over payment of the initial amount borrowed and all products in the range come with a product fee of £999.

St James’s Place is planning to offer further products through Metro Bank this year.

David Bellamy, chief executive at St. James’s Place, said the firm has seen a number of its clients looking to provide financial support to adult relatives.

“While it is great to see families offering such support, they also need to be secure in their own future. In an increasingly complex world, the need for reliable and expert advice has never been more obvious,” he added.

“The Intergenerational Mortgage Range allows families to contribute to their children’s home-owning ambitions but also enables them to be secure in their own future and plan for the longer term.”

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