Metro Bank launches no-deposit Joint Borrower Sole Proprietor mortgage

Tags: First-time buyers, Remortgages, Residential mortgages

Quick Summary

Metro Bank has launched a high loan-to-value Joint Borrower Sole Proprietor mortgage designed to help buyers purchase with little or no deposit. The product allows up to four applicants on the mortgage, with all four incomes considered for affordability. Borrowers can access up to 95% loan-to-value with non-family supporting applicants and up to 100% loan-to-value where all borrowers are immediate family members. The main buyer owns the property, while supporting borrowers help with affordability but are not named on the title. Trinity Financial says the just under 7% five-year fixed rate is not cheap, but the product could help younger buyers, friends or family members buy sooner if they cannot save a larger deposit.

Metro Bank launches 100% Joint Borrower Sole Proprietor mortgage

Metro Bank has launched a new Joint Borrower Sole Proprietor mortgage allowing some buyers to borrow more than 95% and up to 100% of the property value with support from an immediate family member.

The product is designed to help first-time buyers and existing homeowners who need extra affordability support to get onto the property ladder or move home. It may be particularly useful for younger buyers who have strong earnings potential but little or no deposit.

How does Metro Bank’s JBSP mortgage work?

A Joint Borrower Sole Proprietor mortgage allows more than one person to be named on the mortgage, while only the main applicant owns the property. The supporting borrower helps boost affordability but does not appear on the property title.

Metro Bank says its new product allows customers to borrow over 95% and up to 100% loan-to-value where they have an immediate family member, such as a parent, acting as joint borrower. Both the borrower and joint borrower are liable for the repayments, but the main borrower keeps the legal rights to the property.

What is Metro's 100% mortgage key acceptance criteria?

Metro Bank’s product has several important features:

Metro Bank JBSP feature	Details
Maximum loan-to-value	Up to 100% with immediate family support
Non-family support	Up to 95% loan-to-value with non-family supporting borrowers, subject to criteria
Number of applicants	Up to four applicants on the mortgage
Income used	All four incomes can be considered
Maximum loan	Up to £675,000
Product type	Five-year fixed rate
Rate	Just below 7% fixed for five years
Fees	No product fee or valuation fee
Mortgage term	Minimum five years, maximum 35 years
Ownership	Main borrower owns the property; supporting borrower is not on the title

Metro Bank’s intermediary criteria also says it can consider up to four applicants on the mortgage, with all four incomes used for affordability. Its core range supports Joint Borrower Sole Proprietor up to 95% loan-to-value with non-family supporting borrowers and up to 100% loan-to-valuel borrowers are immediate family members, subject to criteria.

Why is this different from other no-deposit mortgages?

There are more lenders offering no-deposit or family-assisted mortgage options, but Metro Bank’s product appears different because it combines high loan-to-value borrowing with a Joint Borrower Sole Proprietor structure.

Some 100% mortgages rely on a rental payment track record. Others require family savings or a charge over a parent’s property. Metro Bank’s product uses supporting borrowers to help affordability, with immediate family members able to support borrowing up to 100% loan-to-value or with no deposit.

This could help buyers who have enough income within the family group to support the mortgage but have not been able to save a deposit.

Is the rate competitive?

It is fair to say the rate is not cheap. At just under 7% fixed for five years, borrowers may pay more than they would on a standard mortgage with a deposit.

However, the product may still be useful if it allows younger buyers, family members or applicants combining incomes to buy a property they are already renting or have found and want to buy. For some borrowers, it may be the difference between staying in rented accommodation and getting onto the property ladder.

If buyers can save even a small deposit and qualify for a cheaper mortgage elsewhere, that may be worth exploring. But where borrowers are struggling to raise a deposit and have family support, Metro Bank’s product gives them another option.

Who could benefit from this mortgage?

Metro Bank’s high-LTV JBSP mortgage may suit:

First-time buyers with little or no deposit
Buyers whose parents can support affordability
Younger applicants with strong future income potential
Families wanting to help without gifting a deposit
Applicants who need up to four incomes considered
Buyers who want the property owned by one person
Some people who are renting and want to buy the home they live in

It may also help where a parent is an existing homeowner and wants to support the mortgage without being listed as an owner of the new property. This can help avoid the additional stamp duty surcharge that may apply when someone already owns another property and buys a share in a second home.

What should borrowers watch out for?

The supporting borrower is taking on a real financial commitment. Even though they are not on the property title, they are liable for the mortgage repayments. If the main borrower cannot pay, Metro Bank says the joint borrower is a safety net and may need to cover the cost. For this reason, they need to take separate legal advice before the mortgage can be completed to ensure they fully understand what they are signing up for. In many cases, the JBSP will not be able to borrow as much money from a mortgage lender if they want to move home and even remortgage to another lender to access a cheaper rate on their home.

Borrowers should also think carefully about the higher rate, five-year commitment, affordability checks and whether the arrangement affects future borrowing for the supporting family member.

Metro Bank also says properties above commercial premises and new builds are not accepted for this Joint Borrower Sole Proprietor mortgage.

Aaron Strutt, product director at Trinity Financial, says:

“Metro Bank’s new Joint Borrower Sole Proprietor mortgage is a welcome addition at a time when many younger buyers need more help to get onto the property ladder.

“It is fair to say the rate is not amazing, but if the product allows younger people and family members to club together and buy the property they are renting or have found, at least it gives them an option. The maximum mortgage loan size of £675,000 is pretty high, especially for applicants with a very small deposit or no deposit at all.

“There are more lenders offering no-deposit mortgages, but this one is different from many of the others. If a borrower can get a small deposit together to qualify for a cheaper mortgage elsewhere, it may well be worth doing. But if buyers are desperate to get on the property ladder and the mortgage is cheaper than renting, it may be worth considering.

“The key attraction is that no deposit may be needed, up to four applicants can go on the mortgage, and all four incomes can be considered for affordability. The Joint Borrower Sole Proprietor structure also means existing homeowners can support the application without being named on the property title, which can help avoid additional stamp duty issues.”

Why use Trinity Financial?

Trinity Financial’s brokers can compare Metro Bank’s Joint Borrower Sole Proprietor mortgage with other family-assisted and first-time buyer mortgage options.

This includes standard mortgages with a small deposit, 100% family mortgages, guarantor-style mortgages, Joint Borrower Sole Proprietor mortgages, gifted deposit options and lender schemes that use family savings or property security.

The right option depends on income, deposit, family support, affordability, property type and long-term plans.

Speak to Trinity Financial

If you are trying to buy with help from parents or family members, speak to Trinity Financial before applying. Our brokers can explain which lenders may be suitable and whether Metro Bank, Barclays, Family Building Society, Skipton, Cambridge Building Society or another lender is likely to offer the best route.

Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage, book a consultation, or use our appointment calendar

The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Barclays Springboard and Family Building Society offering no deposit family support mortgages

The main lenders offering 100% family-assisted mortgages or deposit-free options with parental support include Barclays and Family Building Society.

Barclays Family Springboard Mortgage allows buyers to borrow with no borrower deposit if family or loved ones provide 10% of the property price as security in a Barclays savings account. The helper’s money is locked away for a set period and can be returned with interest if the borrower keeps up repayments.

Family Building Society Family Mortgage allows borrowers to buy with no deposit where family members provide security instead. This can be through savings placed in a Family Security Account or a charge over some equity in the family member’s property. The security, plus any buyer deposit, must equal 20% of the property value.

Which other lenders offer family support mortgages?

Other useful “family help” options include Joint Borrower Sole Proprietor mortgages from lenders such as Skipton, Barclays, Metro Bank, Newcastle Building Society, Cambridge Building Society and Family Building Society, where parents can go on the mortgage to boost affordability without owning the property. These are not always 100% mortgages, but they can help buyers borrow more.

There are also non-family 100% options, such as Skipton’s Track Record mortgage, aimed at renters with a strong rent-payment history rather than parental support.

Do lenders offer 2% deposit mortgages?

Yes. Newcastle Building Society and The Cambridge Building Society both offer low-deposit first-time buyer mortgages designed to help buyers get onto the property ladder sooner.

Newcastle Building Society’s First Step mortgage allows eligible first-time buyers to borrow up to 98% loan-to-value, with a minimum deposit of £5,000. Loans are available from £96,000 to £350,000, with five-year fixed rates. At least one applicant must be a first-time buyer, and Newcastle says the deposit must be non-gifted so the Bank of Mum and Dad may not be able to help. The product is not available on new builds or affordable home ownership schemes.

The Cambridge Building Society’s First Step mortgage also allows eligible first-time buyers to buy with a 2% deposit, up to 98% loan-to-value. It offers two and five-year fixed rate options, accepts gifted deposits subject to criteria, includes a free basic valuation, and can consider loans up to £500,000 with terms up to 40 years.

These products could help buyers struggling to save a larger deposit, but the rates may be higher than standard 90% or 95% mortgages. Trinity Financial’s brokers can compare low-deposit options with family-assisted, JBSP and standard first-time buyer mortgages.

Do Halifax and Accord/Yorkshire Building Society offer £5,000 deposit mortgages?

Yes. Halifax and Accord for Intermediaries and Yorkshire Building Society both offer low-deposit mortgages aimed at helping first-time buyers buy with just £5,000 saved.

Halifax’s £5k Deposit Mortgage is a five-year fixed-rate repayment mortgage for eligible first-time buyers. Halifax says borrowers with savings of £5,000 may be able to borrow more than 95% of the property value, helping them get onto the property ladder sooner. The product is designed for buyers who can afford monthly payments but are struggling to save a larger deposit.

Yorkshire Building Society’s £5k Deposit Mortgage is available only to first-time buyers and allows a minimum deposit of £5,000, with a maximum property value of £500,000 and borrowing up to 99% loan-to-value. It is not available on new-build flats or houses, or in Northern Ireland.

These products can help buyers who are finding it difficult to save 5% or 10%, but rates may be higher than standard mortgages and there is a greater risk of negative equity if property prices fall.

Accord's £5k mortgage is available for properties between £100,001 and £500,000. The maximum term is 40 years and the maximum age at end of the term is 70. Are joint Accord 5K mortgage applications accepted? Yes, however, for joint applications, at least one applicant must be a first time buyer, and there can be no background properties on the application.

Does Santander offer a 2% deposit mortgage?

Yes. Santander has the My First Mortgage which is a low deposit mortgage for first time buyers only.