Currently most lenders require a relative acting as a guarantor for a young person's mortgage to guarantee the full amount of the mortgage.
By contrast, Market Harborough will ask guarantors to cover only a portion of the mortgage.
As a practical example, Mr Smith earns £20,000 and wants to buy a house at £110,000 and has a deposit of £30,000. He needs to borrow £80,000. The society would normally lend Mr Smith £65,000 (3.25 x his income), which means he is £15,000 short of the loan amount he requires. Before the new scheme was introduced the society would ask the guarantor to guarantee the whole loan of £80,000. Now Market Harborough asks the guarantor to guarantee only the difference of £15,000.
These new arrangements apply to any of the competitive mortgage offers available from Market Harborough.
Market Harborough chief executive Philip Dearing says: “This change will help buyers realise their aspirations of owning a property and will no longer mean rented accommodation being the only option available to them - we are also making it easier for relatives to lend a helping hand to younger people struggling to get into the property market.”