The lender said this will not impact any existing Aldermore mortgage guarantee customers or those in the pipeline.
Aldermore began offering the product in 2011 but said due to changes in customer demand over the last few years, with preference shown for other products designed to help first-time buyers, it has made the decision to withdraw.
The 95 to 100 per cent loan to value (LTV) mortgage had a product fee of £999, with a 5.18 per cent rate for a two- and three-year fixed and 5.28 per cent for a five-year fixed rate.
The maximum loan was £250,000 and required a relative to guarantee 25 per cent of the property’s value using their own home.
Preference for high LTVs
Jon Cooper (pictured), head of distribution at Aldermore said: “There appears to be little demand for this type of product in the market currently, and we are seeing new buyers greatly favour high loan-to-value or Help to Buy equity loan options.
“We continually review our product range to make sure we are providing customers with the facilities they need. For now, we are concentrating on improving our mortgage products that remain popular among first-time buyers.”
Understandable decision
Nick Morrey, product technical manager at John Charcol, said: “I can understand them withdrawing it because of a complete lack of demand – others have rates for less than three per cent.
“When there are other lenders out there doing the same kind of thing with rates below four per cent, it’s hardly surprising they’ve got a lack of demand.”
He added: “It sounds like they’ll concentrate on what they do best, and not have unnecessary products that aren’t particularly popular, and they can’t be competitive on. It’s a very understandable business position to take.”
Christopher Hall, mortgage and protection adviser at 1st Call for Mortgages, said: “With regulation in place at the moment, it’s difficult for people to get on the property ladder without the help of mum and dad. They’re in competition with the likes of Barclays and Halifax.
“A lot of mortgages are arranged by brokers, so they’ll compare the products and if another lender is more competitive then people are going to go there if they fit criteria. But if it’s low demand you can’t blame them for withdrawing it. They could maybe make it more competitive instead, but you can’t criticise them for withdrawing.”
