First time buyers will be able to avail mortgages from Lloyds TSB with just 5 percent deposits along with the help from local authorities.
Launching the product today, Lloyds said first time borrowers need to put in 5 percent of the property value and approach local authorities for the remaining amount under the Lend a Hand mortgage scheme. The local authorities will then, at their discretion, indemnify up to 20 percent of the property value through cash backed securities as additional guarantees and earn interest on the same.
The local authorities will decide the area where the scheme will be made available. Upon approval, Lloyds will advance loans ranging between £25,000 and £350,000, which needs to be sanctioned by the local authority as well, subject to fulfillment of lending criteria.
“By developing Local Lend a Hand and working with local authorities across the UK, we’re broadening the prospect of home ownership to even more first-time buyers”, said Carol Anderson, head of mortgages at Lloyds TSB.
The bank plans to roll-out the scheme throughout UK this year and is currently working with the local authorities in Warrington Newcastle under Lyme, East Lothian and Blackpool.