The Times - Mortgage lender bans the Bank of Mum and Dad
Newcastle Building Society has a new mortgage for first-time buyers — the only catch is that they cannot also be relying on the Bank of Mum and Dad.
The lender said the terms of its deal were designed to ensure that those who do not have the benefit of parental help have a chance of getting onto the property ladder.
Aaron Strutt from the mortgage broker Trinity Financial said the move was “highly unusual for a mortgage lender” and he knew of no other lenders imposing such restrictions.
Aaron added: “Lenders have been pushing for more first-time buyer business, and not all of them are going to have a 10 or even a 5 per cent deposit, so they need a bit more help. The rates can range quite substantially, so it’s not always worth taking the first low deposit offer you see.
“A lot of people benefited from those low-deposit deals years ago, so it doesn’t seem unreasonable to have them. But you need to have a good credit score, a decent income or a track record of paying rent — it’s not like it was before 2008 when pretty much anyone could get them.”
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