Barclays has launched a mortgage scheme that allows parents to include their income as part of their child’s affordability check.
The family affordability plan, called Helpful Start, allows parents’ income to be taken into account without their names appearing on the property deeds.
The scheme is available across the lender’s whole mortgage range, including its NewBuy product.
It lets parents help their children get on to or move up the property ladder through a joint mortgage.
Parents’ income may be used, alongside that of the child’s, to calculate how much they can afford to borrow. If eligible, they can use the total income on the application.
Once the mortgage is approved, all parties will be liable for the monthly payments. The parents will appear on the mortgage but will not be co-owners of the property. When the children want to go it alone they can remove their parents from the mortgage by remortgaging.
If the parents are dueto retire during the mortgage term, they will need to prove what income they are due to receive during retirement.
Aaron Strutt, product and communications manager at Trinity Financial, says: “The move is one of the most positive ideas we have seen for quite some time.
“Mortgage lenders have been tightening their affordability calculations for the past few years and it would be nice to see more initiatives like this.
“The only issue will be the maximum age and how old parents can be at the term of the mortgage.”
Barclays told Mortgage Strategy’s sister publication, Money Marketing, that it is also working on another product, where parents can help
children access lower rates by using savings as security, similar to Lloyds TSB’s Lend a Hand.