What is a family springboard mortgage?

A family springboard mortgage is one when the borrower puts down a 5% or 0% mortgage deposit and their family member puts away 10% to 15% of the property price away in a savings account in return for fixed interest.

The family members money will usually be returned within 2to 3 years but if the borrower defaults or misses some payments then it may be held longer.

For a family springboard mortgage, you will usually need a mortgage deposit of 5% but in some cases, a 0% mortgage deposit may be enough.

The different family springboard mortgage providers at the moment are:

How does family springboard mortgage work?

The Family Springboard mortgage isn’t considered a guarantor Mortgage but it kind of works like one. It works by allowing a family member to put 10% of the property price in a savings account for 3 years. Interest is paid on the money and it is returned (+interest) after 3 years although it may be held for a further period if you fail to keep up on your monthly mortgage repayments.

With the family springboard mortgage:

  • You have full ownership of the property

  • A springboard mortgage term is usually over 25 years.

  • Your first 3 years of the mortgage are usually on a fixed rate

  • You can get a mortgage for 5.5 times your income (although most family springboard lenders may cap this at 4 times your income)

  • You don’t need a mortgage deposit

  • You can pay a 5% mortgage deposit to reduce your LTV

  • If you miss payments, some lenders will hold the savings until accounts are up to date and there are no missed payments within a 12 month period.

  • Self-employed borrowers may find it hard to get a family springboard mortgage (Tip: Use a self-employed mortgage broker)

  • You can get the family springboard mortgage with bad credit but you may be limited to your choice of mortgage lenders. (Tip: Use a bad credit mortgage broker)

  • Some mortgage lenders may accept benefit income but they will vary in how much of it they accept e.g a lender may accept 90% of income benefits whilst another may accept 40% of income benefits

  • You will not be able to access the funds you put in a savings account regardless of if there is an emergency. You will have to wait until the term has expired and then withdraw your funds.

  • Two or more people can help you with the family springboard mortgage security deposit by setting up two separate saving accounts

  • A family springboard mortgage is available to both home movers and first-time buyers

  • The family springboard mortgage can be used with most government first-time buyer schemes

  • You cannot use your family springboard mortgage for new build properties due to the fear of negative equity.