Second Charge Mortgage - The Bank Of "Mum & Dad".

We have previously written about the challenges first-time buyers face, in particular, the need for at least a 10% deposit and higher rates so a parent financially helping out is becoming commonplace.

The option for parents to be able to 'gift' a deposit to their children is available with many lenders, but there are often tight restrictions imposed on the amount of the 'gift' and who can make the 'gift'. Almost 25% of all property transactions in 2020 have involved family backed contributions. Parental or other close family gifted deposits are a fantastic way to help would-be first-time buyers to take that first step to own their own home.

But of course, mum and dad need to have that cash liquid themselves to be able to give to their children. What if mum and dad want to give their children a deposit but don't have the cash because all their wealth is tied up in their property? Well, one particular lender has just launched a second-charge mortgage explicitly designed for the "bank of mum and dad. It allows a parent to borrow against their own home, up to 75% of the value, alongside their primary mortgage. It enables the parent to release cash to pass onto their children as a deposit for their first time purchase. Fixed rates start at just 3.99%, which is very competitive for a second-charge mortgage. A parent can borrow from £10,000 to £250,000 subject to a maximum of 75% of the value of their own home, taking into account their primary mortgage.

Are you a first-time buyer, parent or other close family member looking to support a first-time buyer? Then this is one possible option for you. We take the time to understand you and what you are looking to achieve, and with access to the whole of the mortgage markets, we can assess all options and advise on what is most appropriate for you.

Contact us today for a chat with one of our friendly experienced local brokers on 01506 537111 or email us

GreenShoots Financial Ltd, Bathgate Business Centre,  6 Whitburn Road, Bathgate, West Lothian, EH48 1HH

GreenShoots Financial Ltd is authorised and regulated by the Financial Conduct Authority and is a Registered in Scotland with Company number: SC553850, Registered at Bathgate Business Centre,  6 Whitburn Road, Bathgate, West Lothian, EH48 1HH.


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