Vernon launches combined JBSP and guarantor mortgage for first-time buyers

Vernon Building Society has launched a 'Head Start' mortgage product which allows first-time buyers to effectively borrow 100% of the property’s value.

The product allows one or more family helpers to support a buyer in two ways – by putting up security against the mortgage and becoming a joint borrower - combining a joint-borrower sole-proprietor mortgage with a guarantor product.

The buyer purchases a property in their own name with a mortgage of up to 100% of the property’s value, supported by one or more helpers who will be joint borrowers on the mortgage.

They will also provide additional security on borrowing over 80% LTV, in the form of cash held in a Vernon savings account (which earns interest), or a charge on their property (on borrowing over 75% LTV).

After five years, the family helper will receive their funds back or have the legal charge removed from their property, as long as the buyer can afford to take on the mortgage on their own.

The fee-free mortgage has a pay rate of 3.40%, which is a 2.7% lifetime discount from the lender’s standard variable rate of 6.10%. The interest rate is also 'floored', which means it will never fall below 2.50% during the discount period.

The mortgage is available on loans from £125,000 - £500,000, up to a maximum 35-year term.

Brendan Crowshaw, head of mortgage and savings distribution at Vernon Building Society, said: “We’re thrilled to launch Head Start to help buyers into a home of their own with family support.

“This innovative mortgage helps borrowers to boost their buying power and get over the deposit and affordability barriers to homebuying.”