Delayed Start Mortgages

A smart solution for first-time buyers

"We’re really excited about our new Delayed Start Mortgage, 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, and it all adds up quickly.

That’s why we’ve launched our Delayed Start Mortgage. As the name suggests, it allows your clients to delay their mortgage repayments for the first three months. It’s a simple idea, but one we think can make a real difference."

Jennifer Lloyd
Head of Mortgage Products and Propositions

How it works

• Delayed payments for three months: No mortgage repayments are due for the first three months after completion, but interest does 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. 

Jen Lloyd, our Head of Mortgage Products and Propositions, is here to tell you a bit more about our Delayed Start Mortgage and why we've decided to launch this product. Jen explores which clients may be best suited to the Delayed Start Mortgage and how they could benefit from it.

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 payments are delayed for the first three months, but interest will accrue from day one. The interest is calculated daily at the current rate and then added to the overall mortgage balance on the 1st of the month. This does mean that your client will pay more interest over the term of their mortgage, as payments will include the interest accrued over the first three months.
• If your client can afford to make payments in the first three months, then another product will be more suitable.
• This mortgage may be paired with our Income Booster scheme, providing further support. It cannot be combined with government schemes such as Shared Ownership, First Homes (England) or Help to Buy (Wales).
• Clients can make overpayments up to 10% of the original loan amount per year (including during the first three months), without incurring Early Repayment Charges.
• Our Delayed Start Mortgages can be used to purchase new build properties.