Savills Private Finance (‘SPF’), one of the UK’s leading independent mortgage brokers, is offering graduates tailored mortgages to assist them in taking their first step onto the property ladder.

Recent rises in house prices have left first-time buyers requiring large deposits to buy a home. Buying a first home is made more difficult by the low levels of starting salaries in some careers, hampering a graduate’s ability to raise sufficient funds on typical wage multiples.

SPF is offering a bespoke Graduate Mortgage through Scottish Widows Bank, with the ability to borrow up to 100% of the property’s value overcoming the hurdle of raising a deposit. The potential to borrow more capital, than would be available to a graduate on an individual basis, is facilitated through a guarantor arrangement. Parents, who are individually assessed, can act as guarantors for the portion of the mortgage over and above their child’s earnings, rather than for the whole mortgage. Once the borrower is earning enough to cover the whole loan, the guarantor is released.

Mark Harris, Director of SPF, says:

“More than 53% of graduates are forced to return to their parents’ home when they leave university. But, by seeking advice and taking out a bespoke mortgage, it is possible for them to sidestep the traditional problems of needing a large deposit and not being able to raise sufficient funds to buy their first home.”

Scottish Widows Bank's Graduate Mortgage is:

• Available to those who have been employed for 12 months and who graduated in the last seven years
• A base rate tracker, which includes an initial discount or a stepped fixed rate
• Offering a loan-to-value (LTV) of up to 100% with additional 2% to cover associated costs, such as stamp duty and legal fees

Mark Harris continued:

“For any first-time buyer, one of the most important considerations is the ability to afford monthly payments, especially if interest rates should rise. A fixed rate provides the borrower with certainty, allowing them to budget their monthly outgoings, which is especially important for graduates when they are just starting out in their careers.

“We advise would-be borrowers to seek specialist advice to avoid lenders who charge Mortgage Indemnity Guarantee (MIG) associated with 100% LTVs.”

(1 July 2003)