The Barclays springboard Mortgage (Guide)

What is the Barclays springboard Mortgage?

The Barclays Springboard mortgage isn’t considered a guarantor Mortgage but it kind of works like one.

The Barclays springboard mortgage is a type of family springboard mortgage and other examples from other mortgage lenders include the post office family link mortgage and the Lloyds bank lend a hand mortgage

You won’t have to put any mortgage deposit down but instead, your family member or friend will have to put money away in a Barclays saving account.

The barclays springboard mortgage works by allowing a family member to put 10% of the property price in a Barclays Helpful start 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 or default on your mortgage.

The maximum house price you can use for a Barclays springboard mortgage is £500,000.

You can have a Barclays springboard mortgage with a minimum term of 5 years and a maximum term of 25 years.

For the first 3 years of your Barclays springboard mortgage, your mortgage will be at a fixed rate and at the end of this fixed rate period you will then be moved over to the Barclays lifetime tracker rate.

An example of the Barclays springboard mortgage (100%LTV):

You want to buy a £300,000 home with the Barclays springboard mortgage.

A family member or friend will need to put away £30,000 in a Barclays helpful start account for 3 years. They will receive interest for their £30,000.

After the 3 years have passed your family member or friend will receive their £30,00 back with interest if you have kept up to date will all your mortgage repayments and haven’t defaulted on your mortgage.

The Barclays springboard mortgage can also be used with a 5% mortgage deposit if you are not eligible for the 100% loan to value.

An example of how the 95% LTV Barclays springboard mortgage will work:

A family member or friend will need to put away £30,000 in a Barclays helpful start account for 3 years. They will receive interest for their £30,000.

You will also need to put down a 5% mortgage deposit of £15,000.

After the 3 years have passed your family member or friend will receive their £30,00 back with interest if you have kept up to date will all your mortgage repayments and haven’t defaulted on your mortgage.

Who can use the Barclays springboard mortgage?

The Barclays springboard mortgage is for both first-time buyers and home movers.

How much income do you need for the Barclays springboard mortgage?

Barclays lays out exactly how much you may need to be eligible for its Barclays springboard mortgage

If you earn up to or less than £50,000 then you will be eligible for a 4.0. Income multiple on your Barclays spring board mortgage. This means Barclays will lend you up to 4.0 times your income.

If you earn more than £50,000 then you will be eligible for a 5.5. Income multiple on your Barclays spring board mortgage. This means Barclays will lend you up to 5.5 times your income.

You can earn this as an individual borrower or together as joint borrowers.

Here are the main features of the Barclays springboard mortgage:

• Mortgage deposits from 0% – 9.9% are accepted
• 5.5x income multiples for mortgage applicants who are earning more than £50k
• Your family members (Helper(s)) who help you by putting their savings away will receive interest of 1.5% over Bank of England base rate
• The Barclays springboard mortgage will be available for both first-time buyers or home movers
• The maximum property value for any Barclays springboard mortgage will be up to £500,000
• The Barclays springboard mortgage is not available for new build properties
• The Barclays springboard mortgage is only available for a term of between 5 and 25 years.
• With your Barclays springboard mortgage, you are going to retain full rights over the property from day 1.
• The Barclays springboard mortgage has a fixed APRfor 3 years and after this, you will move on to the Barclays LifeTime Tracker rate.
• Your family members who help you with their savings are not guarantors or on your mortgage deed. This means they don’t have any stamp duty liability.
• After you have benefitted from the Barclays springboard mortgage you can then help someone by becoming their helper or your helper can go on to help other borrowers.

Who may the Barclays springboard mortgage be suited to?

Families or friends looking to support a family member or friend to get on the property ladder

Borrowers who can’t save a mortgage deposit but have family or friends who have savings they can afford to put away for 3 years.

Borrowers with small mortgage deposits

The process of the getting a Barclays springboard mortgage for a borrower

As a borrower, you get a mortgage agreement in principle from Barclays for the Barclays springboard mortgage.

Your mortgage in principle could still be declined if Barclays find something further down in the mortgage fact find process.

You then go on to get a mortgage offer from Barclays for the Barclays springboard mortgage.

You will then complete on your Barclays springboard mortgage

The process of the getting a Barclays springboard mortgage for a helper

• As a helper, you will be putting 10% of your mortgage deposit away for the Barclays springboard mortgage.
• You will first have to fill the application form for the Barclays helpful start account.
• You will then have to seek independent legal advice so you know exactly what you are getting into.
• Your Barclays helpful start account will be opened.
• You will then complete the independent legal advice and pay the 10% of the property into your Barclays helpful start account.
• Your money will now be locked in the account for the next 3 years and could be more if the borrower defaults on their mortgage repayments or misses some of their mortgage repayments.

What happens at the end of the 3 years fixed period?

For the borrower, you will simply be moved on the Barclays lifetime tracker rate from their fixed rate.

At the end of the Barclays springboard mortgage fixed 3 year period, your helper’s Barclays helpful account will be closed and they will received their saving plus interest.

If you have missed any repayments or defaulted on the mortgage then Barclays may hold onto their saving for longer as per their terms and conditions.

Your helper will receive a letter 30 days before the account is due to mature and will receive another letter on the day the helpful account matures.

Government schemes you could use rather than the Barclays springboard mortgage

You may be able to get some home buying government schemes for first-time buyers and home movers which could increase your mortgage deposit or reduce the total cost of purchasing the property.

They are:

• 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.

You may also be able to use a host of mortgages with the help of your family.

They are a certain type of mortgage known as a family springboard mortgage, they include mortgages from lenders such as the Barclays family springboard mortgage, the Lloyds lend a hand mortgage or the post office family link mortgage.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.