Delayed Start mortgages

A smart solution for first-time buyers

"We’re really excited about our Delayed Start mortgages, designed to support your first-time buyer clients as they take that big step onto the property ladder.

We recently ran a survey, and it confirmed what many of us already suspected: most first-time buyers feel financially stretched in the first few months after moving into their new home. It’s a costly time. Many are transitioning from renting to owning, which often means a period of double payments – rent and their first mortgage repayments overlapping. Add in moving costs, furniture, white goods, deposits, and now stamp duty, it all adds up quickly.

That’s why we’ve launched our Delayed Start mortgages. As the name suggests, it allows your clients to delay their mortgage repayments for up to the first three months (1, 2 or 3 months – depending on the product chosen) after completion, Interest will accrue from day one. It’s a simple idea, but one we think can make a real difference."

Jen Lloyd
Head of Mortgage Products and Propositions

How it works

• Delayed repayments for up to three months: No mortgage repayments are due for up to the first three months (1, 2 or 3 months – depending on the product chosen) after completion but interest will accrue from day one.
• Range of fixed rate options: Clients can fix their interest rate for two or five years.
• High LTV: Clients could borrow up to 95% of the property value, meaning they may only need a 5% deposit.

Things to know

• At least one applicant must be a first-time buyer to qualify. This means they can't ever have owned an interest in a residential property in the UK or abroad. This includes Buy to Let properties and any property that has been inherited, even if they've never lived there.
• Mortgage repayments are delayed for up to the first three months (1, 2 or 3 months - depending on the product chosen) after completion. The interest is calculated daily at the current rate and then added to the overall mortgage balance on the first of the month. As a result, your client will pay more interest over the term of their mortgage because their future repayments will include the interest accrued during the delayed payment period.
• If your client can afford to make repayments up to the first three months (1, 2 or 3 months – depending the product chosen) after completion, then another product may be more suitable.
• The delayed start feature of this mortgage may be paired with our Income Booster scheme, Track Record and Shared Ownership providing further support. It cannot be combined with government schemes such as First Homes (England) or Help to Buy (Wales).
• Clients can make overpayments up to 10% of the original loan amount per year (including up to the first three months even if a delayed start period is in place), without incurring Early Repayment Charges.
• Our Delayed Start mortgages can be used to purchase new build properties.