Family Springboard given fresh bounce

Barclays is making significant improvements to its award-winning Family Springboard mortgage to make purchasing a home easier for first time buyers.

It has also launched a highly competitive five-year fixed rate at 1.99%.

From 6 May, first-time buyers who get the fee-free Barclays Family Springboard mortgage will see a stepped reduction in the interest rate they pay over a three-year period.

They will qualify for lifetime follow on rate of 2.49% + BBBR, which represents a 100 bps reduction on the existing follow-on rate.

Barclays Family Springboard Stepped Fixed Rate Mortgage is designed to help new homeowners adjust to their financial responsibilities with a reducing mortgage payment during the first three years of ownership.

It also allows helpers' to use their savings to help homebuyers secure a mortgage by holding 10% of the purchase price in a Helpful Start account. This enables the homebuyers to apply for a 95% LTV mortgage.

After three years the money is released back to the Helpers' with BOE + 1.5% interest, providing that the mortgage repayments have been kept up to date.

The three-year fix charges 2.99% to 95% LTV, falling to 2.79% in year two and 2.59% in the third year, with no application fee.

Andrew Montlake, director at Coreco Mortgage Brokers, said: "The Springboard product shows that innovation can exist in the current environment and these improvements confirm that there are lenders out there that want to lend and support the first-time buyer market.

"The appeal to family members is that they know their savings are helping their children without giving them up entirely.

"Having the rate 'step down' over the initial three-year term also gives further comfort that the mortgage will remain affordable and the savings returned, with interest, after three years."

Barclays has reduced the fixed rates on its two, five and 10 year fixed rates across its range, as well as introducing a five-year fix at 1.99%, significantly reducing repayments for customers.

Those looking to remortgage can choose from a number of rates, including Barclays' fee-free Great Escape products, which have an option for a £400 cashback.

Andy Gray, managing director of mortgages for Barclays, said: "This rate is only available for a limited period, so customers need to act now to ensure they secure the best deal for them."