A mortgage aimed specifically at first-time buyers has been launched by Lloyds TSB.
The product, named Lend a Hand, can be obtained at a 95 per cent loan-value, meaning that borrowers only need a five per cent deposit.
In addition, it has been made available at 4.39 per cent, which the lender stated could lead to homeowners paying £100 less than the average seen in the industry.
However, to access this rate, customers must take a legal charge on a savings account that belongs to their parents.
Lloyds explained that this means that the parents can earn interest on their savings, while the bank can lend to home buyers with “less of a credit footprint”.
“As the UK’s largest mortgage lender we’re committed to helping first-time buyers onto the housing ladder and this includes finding innovative ways to lower the first rung,” commented director of mortgages Stephen Noakes.
Meanwhile, the Council of Mortgage Lenders has noted that rates currently stand at the lowest level seen since 2004, but only for those who can provide a large deposit.