Aldermore launches 100% LTV mortgage

Specialist lender Aldermore has launched a 100% LTV Guarantor mortgage to help "disenfranchised" first-time buyers get on the housing ladder.

The Family Guarantee mortgage is available up to 100% LTV and has a three-year fixed rate of 6.48%. 

Aldermore said it has tried to mitigate risk by stipulating 25% of the loan is guaranteed by a parent or legal guardian through a charge on their own property. The parental guarantee will fall away after 10 years.

The deal will initially be piloted via three distributors including Connells Group, Arun Estates and 3mc, to potential homebuyers throughout England and Wales.

Loans are available on a repayment basis only and are available up to a maximum loan size of £250,000. The minimum age of the borrower is 25.

Charles Haresnape, managing director of residential mortgages at Aldermore, said: “Family support in the form of gifted deposits has become commonplace and is widely accepted by most lenders.

"The Aldermore Family Guarantee Mortgage gives much greater flexibility, enabling guarantors to retain savings and instead provide a guarantee, requiring no cash deposit.

“We’ve carefully considered the needs of the guarantor, resulting in a guarantee that is capped at the originally agreed amount. The guarantee can also be repaid at any time, or released if the loan to value on the mortgaged property falls to 75% or lower."

He added: "Perhaps most importantly, we’ve limited the guarantee period to just 10 years at which point it will expire, giving guarantors clarity as to how long their commitment will last.”

There are only a few lenders offering 100% deals in the market, including Northern Irish lender Northern Bank and two small building societies, Tipton & Coseley and Marsden. However these are restricted to customers in their local area.