Family Assist 3 Year Discounted Variable Rate – House Purchase Only – DFM004

A mortgage available for residential purchase, where the buyer(s) is supported by a family member providing security either as cash savings with us or as equity in their own property.

Key Details

Term 3 years
Initial Rate1 5.89% variable
Overall Cost For Comparison2 7.1% APRC
MAX LTV3 100%
Early Repayment Charge 3% in Year 1, 2% in Year 2, 1% in Year 3
Product Fees £199 application fee, no completion fee

Product Fees

  • The £199 Application Fee is non-refundable and payable at the point of application.

Mortgage calculator

£
£
years
%

Representative Example

A mortgage of £226,500.00 payable over 40 years initially on a variable rate, currently 5.89% for 3 years then on our follow-on rate of a 1.74% discount off our standard variable rate (currently 8.89%) giving a rate of 7.15% variable for the remaining 37 years would require 35 monthly payments of £1,229.55 and 444 monthly payments of £1,424.57; plus one initial interest payment of £1,129.96.

The total amount payable would be £677,552.29 made up of the loan amount, plus interest and fee(s) totalling £451,052.29. This includes Application Fee (£199), Chaps Fee (£25), Valuation Fee (£180), Legal Fees (£350) and Redemption Administration Fee (£125).

The overall cost for comparison is 7.1% APRC representative.

A representative example is designed to help understanding of the typical cost of this mortgage. This is not a an illustration and is only provided as an example.

Mortgage Product Features

  • The Initial Rate is discounted by 3.00% below our Standard Variable Rate (SVR) for the first three years, giving a current rate payable of 5.89% variable.
  • At the end of the three years our follow-on rate of 1.74% below our SVR will apply for the remainder of the mortgage term, currently 7.15% variable.
  • A minimum interest rate of 3% will apply during the full term of the mortgage
  • Available for house purchase only
  • Capital repayment only
  • Minimum loan size £50,000. Maximum loan size £500,000
  • Valuation fee payable by customer
  • Legal fees payable by customer
  • An Early Repayment Charge of 3% will apply if the mortgage is redeemed at any time during the first year, followed by 2% in the second year, and 1% in the third year. The Early Repayment Charge is a percentage of the balance at the point of redemption. Early Repayment Charges do not apply on our Standard Variable Rate (SVR) or our follow-on rate
  • A family member must provide security equal to 20% of the value of the property being purchased as either savings deposited with the Society (Option 1) or as collateral from equity in their property (Option 2). See below for details

Will the interest rate change?

A discounted variable rate mortgage is discounted from our Standard Variable Rate (SVR), and as a result, the initial rate will go up or down when we change our SVR and by the same amount. We choose when to change our SVR depending on a variety of factors and our SVR is not directly linked to the Bank of England Base Rate (BBR). If the interest rate goes up, we will write to borrowers in advance to inform them of the intended changes.

When borrowers come to the end of the initial rate term, we will write to them to offer them another deal and they can either choose to accept this deal, remortgage to another lender, or should they do nothing, revert onto a follow-on rate at 1.74% below our Standard Variable Rate (SVR).

The follow-on rate is also variable and may go up or down. A minimum interest rate of 3% will apply during the full term of the mortgage term.

How much are valuation fees?

The fee charged is normally based on the purchase price of the property at the time of inspection. Where the purchase price is preferential or where the price is not known at the time of inspection, the fee charged will be based on the valuation figure. Unless otherwise stated in the product features, a basic valuation fee is payable by the applicant(s).

You can find out more including the fee scale in our Mortgage Valuation Fees document.

How it works: Deposit savings in a Mansfield Family Assist Savings Account (Option 1)

• Family member uses their savings to help the buyer without having to ‘give’ the money to the borrower.
• Family member deposits funds in a specifically designed savings account.
• The savings deposit must be for an amount equal to 20% of the value of the property being purchased.
• Family member providing the savings deposit will not normally be able to access the funds until 7 years have passed with release of the balance subject to terms in the Agreement.
• Provided all obligations are met, savings are returned to the family member when they are released from their commitments.
• Only available in England and Wales.

What to consider when using savings as security

• The property is owned by the borrower. Family member(s) providing support have no rights to the property being purchased.
• When family members provide savings as collateral security, they enter into an Agreement, which includes conditions relating to the borrower and the consequences of the borrower not maintaining their mortgage repayments.
• Savings deposited with us are held in a Mansfield Family Assist Savings account and cannot be accessed whilst the Agreement is in place (normally 7 years as above).
• The family member’s savings could be used to cover losses incurred by the Society in the event of repossession where the amount obtained from the sale of the house is not sufficient to repay the amount owing. The funds may also be called upon to make up any mortgage payment shortfall by the borrower.
• Where the savings option is chosen it is recommended that family members take Independent Legal Advice to ensure that they are aware of the commitment they are undertaking and the risks involved before giving us a ‘legal charge’ over their savings.
• Annual mortgage statements will only be issued to the borrower because the family member(s) isn’t responsible for maintaining the monthly mortgage payments. The family member(s) will be notified if mortgage payments are not made.

How it works: Using collateral from equity in a family member's home (Option 2)

• Allows family members to help even if they don’t have savings available to tie up but do have equity in their home.
• Family member agrees to some of the equity in their residential property being used as security.
• The Society takes a ‘legal charge’ equal to 20% of the value of the property to be purchased, over equity in the family member’s residential property.
• This means the Society will have legal rights over the family member’s residential property.
• The ‘legal charge’ over the family member’s residential property will not normally be released until 7 years have passed with release of the ‘legal charge’ subject to the terms in the Agreement.
• The collateral will be released subject to the agreement of the Society, the conditions of which can be found here.

What to consider when using equity as security

• The property is owned by the borrower. Family members providing support will have no rights over the property being purchased.
• When family members provide equity as collateral security, they enter into an Agreement, which includes conditions relating to the borrower and the consequences of the borrower not maintaining their mortgage repayments.
• Family members using equity may be restricted if they want to move home or borrow more money themselves.
• The family members’ residential property may be repossessed by us to recover debt in the event that the borrower’s property is repossessed and/or sold at a loss. Liability is limited to the amounts specified in the ‘legal charge’.
• Where the collateral charge over property is chosen, family member(s) will be required to take Independent Legal Advice before the borrower is committed to the purchase. This is to ensure they understand the commitment they are making and the risks involved before giving us a ‘legal charge’ over cash and/or property. To avoid a conflict of interest, family members can’t use the same solicitor who is conducting the conveyancing on the linked mortgage but it can be another solicitor from the same firm.
• The property collateral may not be released if mortgage payments have not been satisfactorily maintained.
• Annual mortgage statements will only be issued to the borrower because the family member(s) isn’t responsible for maintaining the monthly mortgage payments. The family member(s) will be notified if mortgage payments are not made.

Important Information

Unless otherwise stated, our mortgage products are available for house purchase or remortgage. All our mortgage products are subject to availability and can be withdrawn at any time.

All mortgage applications are manually underwritten by our experienced underwriters and are subject to a full assessment against our lending criteria.

It is important that you take time to read and understand the mortgage product features detailed above and the information about our Residential or Buy to Let mortgages detailed in the General Information Guides.

How to Apply

All of the mortgages shown are available direct from us via our qualified sales team, please call on the number above, request a call back, or submit a detailed contact request to find out more.

To get an indication of whether this mortgage is right for you, you can use our repayment calculator to see what the potential monthly repayments might be.

Your home may be repossessed if you do not keep up repayments on your mortgage

Definitions

1 The Initial Rate is the rate available during the initial term of the mortgage. Once the initial rate term has expired, the mortgage will either revert to our Standard Variable Rate (SVR), or a follow-on rate that is a discount off our SVR.

Our SVR is set by us and is currently 8.89%, as a variable rate it may go up or down. Our follow-on rate is 1.74% below our SVR and is currently 7.15% variable. Our follow-on rate will go up or down with changes to our SVR.

2. The Overall Cost for Comparison is given as the Annual Percentage Rate of Charge (APRC) and includes all charges incurred relating to the mortgage. The APRC is intended to help you as a borrower compare the interest rates on different products.

3. Like all other mortgage lenders, we will allow you to borrow against a proportion of the overall property value. This is known as Loan to Value (LTV) and is expressed as a percentage. For example, if you want to purchase a property at £100,000 and you would like to borrow £85,000, then you will need a mortgage available at 85% Loan to Value (LTV). The available LTV can vary depending upon the type of mortgage.

Shared Ownership mortgages will offer two percentages under LTV – the proportion of the property value and the proportion of the share being purchased.

Request a callback

Mansfield for Intermediaries

Our intermediaries website is for use by authorised intermediaries only.

Please click on the link below to proceed

Continue to intermediaries site