In this brief guide, we are going to discuss the Halifax family bpost mortgage.

Halifax has recently released their “Halifax family boost mortgage” which should, in theory, help more first-time buyers get on the property ladder quicker.

As the name implies, the Halifax family boost mortgage will focus on having family members how can help you get on the property ladder by deposit funds into a Halifax savings account.

The Halifax family boost mortgage can be viewed as a type of offset mortgage.

What is the Halifax family boost mortgage?

The Halifax family boost mortgage is a mortgage which allows your family members to put 10% of the agreed property purchase price in a 3 year fixed term savings account and eliminates the need for you to put any mortgage deposit down.

Once you get a family deposit mortgage, the mortgage becomes yours and there is no one else named on the deeds of the property but you.

The Halifax family boost mortgage has a 3 year fixed interest term at the beginning of the mortgage.

This means your monthly mortgage repayments for the first 3 years stay the same and you can budget easier.

With the family boost mortgage your family members savings will also earn interest and this will mean that they get something out of helping you too.

Your family members will get their money back once the 3-year term ends as long as you have made all your monthly mortgage repayments on time.

If you haven’t made all your monthly mortgage repayments on time then your family members money could be held for a bit longer.

How do the savings work with the Halifax family boost mortgage

With the Halifax family boost mortgage, your family member puts away 10% of the agreed property price into a Family Boost Fixed Savings Account. 

You can have as many as two family members to help you save the money but only one name can be on the savings account.

The money from your family member or family members will need to be in the savings account at least 7 days before the mortgage complete.

Once the funds from your family members have been deposited into the Family boost fixed savings account they can not be taken out for another 3 years.

This means you should be sure that you are going to complete on the mortgage before depositing your funds to the Halifax family boost fixed savings account.

How does the Halifax family boost mortgage work?

The Halifax family boost mortgage works by using the savings deposited by your family members as security for the mortgage.

Your Halifax family boost mortgage will originally be a 3 year fixed repayment mortgage. This means every monthly mortgage repayment you make will go towards clearing the outstanding balance on your mortgage.

There are however some restrictions with the Halifax family boost mortgage which you should know about, they include:

  • You can not use the Halifax family boost mortgage on new build properties
  • You can not use the Halifax family boost mortgage on self-build properties
  • You can not use the Halifax family boost mortgage with the help to buy, shared ownership, share equity or right to buy scheme
  • You cannot get the Halifax family boost mortgage as an interest-only mortgage

Quick facts about the Halifax family boost mortgage:

  • You do not need a mortgage deposit to use the Halifax family bost mortgage
  • The home is completely owned by you, regardless of who has helped you with it. 
  • Anyone who has helped you with the home purchase does not have a legal claim over the property at the time of purchase.
  • Halifax will pay for your standard mortgage valuation and your basic legal fee when you use their conveyancing service
  • You can borrow up to a maximum of £500,000 with your Halifax family boost mortgage
  • You need to be classified as a first-time buyer who lives and is buying a home in England or Wales
  • Buying a home with such little or no mortgage deposit could mean you are at risk to negative equity. Negative equity is when you own more on your mortgage than your property is worth.
  • Your family member who helps you must have a Halifax Reward or Ultimate Reward Current Account before applying for a Family Boost Mortgage. A monthly fee applies to the Ultimate Reward Current Account.
  • You will get £300 cashback towards any of your legal fees. This will be paid to your conveyancer who will then send it to you.

What are the benefits for family members?

There are a number of benefits from family members when helping a family member get on the property ladder with the Halifax family boost mortgage.

  • You will help your family member get on the property ladder much quicker and likely cheaper
  • You will get paid interest on your money for 3 years
  • You will get your money back after 3 years as long as the borrower does not miss any monthly mortgage repayment. If they do then it may take slightly longer. This may also be the case if the home is repossessed.
  • Your money will also be protected by the financial services compensation scheme
  • As of writing, you will earn 2,5% AER on your savings

How to apply for the Halifax family bost mortgage

To apply for the Halifax family boost mortgage you can head over to the Halifax website or call the Halifax family boost branch of Halifax mortgages on 0345 124 1313 to apply or book an appointment.

They are open from Monday to Friday from between 8am to 8 pm and Saturday between  9 am to 4 pm. They are closed on Sunday and on bank holidays.

Alternatives to the Halifax Family boost mortgage

There are other alternatives to the Halifax family boost mortgage which you may want to know about.

Some of these are alternatives provided by mortgage lenders such as:

  • Post office family link mortgage
  • The Barclays springboard mortgage
  • The Lloyds lend a hand mortgage etc

Other alternatives to the Halifax family boost mortgage include government schemes such as:

In some cases, these first-time buyer government schemes will reduce the amount of the property price and thereby increasing the amount of mortgage deposit you have in relation to the property value.

These schemes include:

Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.

Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.

Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.

Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.

Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.

Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.

Right to buy– allows you to buy your home at a discount price.

Preserved right to buy- same as above.

Right to acquire- same as above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

You may also want to use a mortgage broker to apply for your Halifax family boost mortgage and compare all your mortgage options outside of Halifax

.

Use a mortgage broker

You may want to consider using an independent mortgage broker to get a mortgage.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.

This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. 

This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your mortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month.

It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.

Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.

They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

In this brief guide, we discussed the Halifax family bpost mortgage.

If you have any questions or comments please let us know.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.