You are here: Home - News -

Lloyds launches 100% LTV mortgage

  • 28/01/2019
  • 0
Lloyds launches 100% LTV mortgage
Borrowers with no deposit can now apply for a mortgage from Lloyds Bank for the full value of the property being bought with the help of a relative - but not a broker.


The lender has launched a direct to consumer 100% loan to value (LTV) mortgage at 2.99 per cent, fixed for three years.

Under the ‘lend a hand’ deal, parents or other family members are required to put forward cash worth 10% of the loan.

The money is kept in a savings account that pays 2.5 per cent interest and is returned after three years as long as the mortgage repayments have been met.

One of the savers must also be a Club Lloyds current account holder, which allows eligible customers to receive up to £500 in cashback.


Hopes for broker availability

Critics said they hoped the deal would be rolled out across the wider distribution network soon.  

Moneyfacts spokeswoman Rachel Springall said: “The limited distribution channel will enable Lloyds Bank to quantify demand, but hopefully it will soon be rolled out across all channels.”

Greg Cunnington, director of lender relationships and new homes at Alexander Hall, said: “It’s very positive to see another lender, and a major one, look to introduce an innovative product.

“The intergenerational lending space is an area I see becoming an important growth market in the coming years and although the current products available are not perfect they offer a strong solution that many clients will be keen on.

“It is a little odd that this is a direct offering and not available via intermediaries.

“A product such as this involves a client needing to be educated on their options and advice here would be absolutely key.

“This can only be obtained from a holistic overview of a client’s options and scenario, and seeing the potential for a product such as this to work, which the intermediary market is best placed to spot and to advice on.”

Barclays offers a similar ‘family springboard’ deal fixed at three per cent fixed for three years, with a current lower savings rate of 2.25 per cent.

Springall added: “The Lend a Hand mortgage from Lloyds Bank has a maximum term of 30 years, but the Barclays Family Springboard mortgage has a maximum term of 25 years.

“Therefore, borrowers looking to reduce their monthly repayments will find the Lloyds Bank deal very accommodating, but they must be mindful that the longer the mortgage term, the more interest it will cost overall.”

Vim Maru, group director, retail at Lloyds Banking Group, said: “We are committed to lending £30bn to first-time buyers by 2020 as part of our pledge to help people and communities across Britain prosper – and Lend a Hand is one of the ways we will do this.

“Although times have changed, children still have a similar ambition to their parents – to own their own home.

“Lend a Hand helps parents to invest in their children’s future and get the best return on their cash.”

There are 0 Comment(s)

You may also be interested in