I had to check if April Fools’ came early. But no, it’s legit. The scheme is called “First Home” (creative, I know), and it’s aimed at first-time buyers. The gist? You only need a 5% deposit on properties worth up to £500,000.
Here’s the kicker, though: the bank asks your family to put up a bit of cash as a safety net. They call it a “family springboard.” Essentially, your parents or someone else stash away 10% of the house price in a savings account. They earn interest on it, but they can’t touch it for three years.
So it’s not a total freebie. But honestly? If your folks have a bit of savings sitting idle, this could be a genius win-win. They get a safe return, and you get keys to a front door.
Is this a trap? Let’s break it down.
Okay, I’m not a financial advisor (please don’t sue me), but let’s chat like mates. On the surface, a £5k deposit sounds dreamy. But remember: a smaller deposit usually means a bigger mortgage. That also means higher monthly payments, because you’re borrowing more.
You’ll also likely pay a slightly higher interest rate. Banks aren’t charities, after all. They’re just slightly less scary than they used to be. So, run the numbers. Can you actually afford the monthly bill on a £475k loan? Or are you better off saving a bit more?
Lloyds New £5,000 Deposit Mortgage for First-Time Buyers | Essential
Another thing: the family member’s money is locked away. That’s fine, unless grandma suddenly needs that cash for an emergency. So, have an honest chat with them. “Hey Gran, can you trap ten grand for three years so I can buy a flat?” It’s a weird conversation to have over Sunday roast.
