The Rezide Equity Loan has been created by the two housebuilders with real estate asset manager QSix and regulated mortgage lender Ahauz, enabling borrowers to purchase a new-build home from Barratt Redrow or Persimmon with a small deposit.
The Rezide Equity Loan will cover 15% of a property’s market value, up to a maximum loan amount of £100,000. The equity loan will have a fixed interest rate of 4% for the entire term. Borrowers must repay the equity loan if they are selling the property or when the mortgage matures.
The loan can be repaid at any time without any early repayment charges (ERCs).
The remaining 80% of the purchase price will be financed through a second charge mortgage from Barclays or TSB.
The scheme will be rolled out across England and is available to first-time buyers and homemovers looking to move into a new-build home who might otherwise find it hard to buy a property.
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Lee Chiswell, head of mortgages at Barclays UK, said: “Barclays has been focused on making homeownership more affordable for first-time buyers and movers, introducing various enhancements to our new-build proposition in the last year, and we’re delighted to join this initiative and help yet more people get on the property ladder. We’ll be accepting applications for this unique proposition from day one and hope it helps make that dream home a reality for many.”
Craig Calder, secured lending director at TSB, added: “At TSB, we’re pleased to support this innovative new mortgage solution so we can help more customers make their money go further. Whether you’re buying your first home or making a fresh start, this is a great new way to help open the door to property ownership and our specialist new-build team at TSB are on hand to support you.”
Adrian MacDiarmid, head of mortgages at Barratt Redrow, said affordability was still a “big challenge” for many people, not just first-time buyers but also growing families and people coming out of a relationship.
He added: “Since Help to Buy ended, many people have felt homeownership is beyond them. This is why we have worked across the industry to design a mortgage for people to buy a new-build property with just a 5% deposit – helping make the homeownership dream a reality for them.”
Edward McCoy, group sales director at Persimmon, said: “Persimmon is always looking for new ways to improve customers’ opportunities to buy a home. We therefore welcome the launch of the new Rezide Equity Loan scheme, as it will add another useful product that enhances affordability. We look forward to welcoming many new homeowners through this innovative new product.”
Matthew Northover, chief investment officer at QSix, said the scheme had been designed to replace Help to Buy and widen access to homeownership.
He added: “By helping to lower affordability constraints for homebuyers, the new scheme will enable housebuilders to accelerate new developments and meet the new government’s objectives for new homes.”
