Family savings deal to help FTBs

Principality Building Society has launched a direct-only 95% LTV mortgage for first-time buyers.

The assisted first-time buyer product allows family members to use their savings to secure the mortgage of their first-time buyer child or relative.

The deposit, which has to be a minimum of 5% from the would-be buyer, when combined with the family savings must total 25% of the property value.

Principality will take a legal charge over the savings account, paying 3.75% AER, fixed until August 31, 2015. The family member will not be allowed access to their money during this time.

After August 31 2015, if through a combination of repayments and house price rises, the mortgage has reduced from 95% LTV to 90% LTV, the legal charge on the savings account will be lifted, allowing the family member to access their savings.

The mortgage rate is fixed at 4.49% with a product fee of £499.

The society says it has not discounted opening up the deal to brokers in the future.