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Portman offers 5 x salary for key workers

Portman Building Society is offering mortgages worth up to 5 x salary to workers in key public services and young professionals.

The deal is being marketed through the Bradford & Bingley&#39s MarketPlace and offers at least £100,000 to first-time buyers as long as they earn at least £20,000.

The interest rate starts at a fixed rate of 4.95% and increases by 0.5% a year during the fixed period. Borrowers must provide a 10% deposit. Up to 5 x single income or 4 x joint income is offered, with a maximum LTV of 90%.

Ian Darby, group commercial director at Bradford & Bingley, says: “Subject to affordability, this product provides the potential for young professionals and key service workers such as policemen, teachers and nurses, who have been particularly hard hit by recent increases in house prices, to get a foot on the ladder.”

He adds: “There has been criticism that many younger borrowers are in danger of over-extending themselves, particularly in view of the situation that developed in the late 1980s when borrowing was high and interest rates rose dramatically. This product is available only after taking face-to-face advice where affordability, both now and in the future, can be assessed and clearly spelt out to the prospective borrower, reducing much of the risk factor.”

But Mike Fitzgerald, sales director at Brentwood-based Brentchase Financial Services, says: “There should definitely be help for public sector workers, but this is not entirely the responsibility of mortgage lenders. They should work in local partnerships with the government and reintroduction of MIRAS and the removal of stamp duty for key workers would also help. Income stretches make mortgages yet more affordable and risk driving up house prices even further.”

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