Barclays Bank is once again offering the dread 100 per cent mortgage, the dangerous generator of negative equity that trapped people in modern new builds during the banking crash of 2008. The clever thing about this one, though, is that it wants the parents of the applicants to whack some money in too, as sort of generational guilt relieving deposit.
That's the deal behind the Family Springboard mortgage, which lets buyers take out a deal to buy a house as long as: "...your family or loved ones can provide 10% of the property’s price as security." Basically it's time to make dad feel guilty about how little he paid for his house in 1983.
The bank's idea is that this "formalises the financial arrangement" that often sees parents bankrolling the city centre bedsits of their offspring, letting them help out and earn interest at the same time. Ideal if your parents recently downsized and bagged six figures of equity that they're just frittering away on holidays and cars.
The 10 per cent chunk will be held in a savings account earning a relatively decent 2 per cent per year in interest, so it's not like mummy and daddy will be handing away their money for free, and as long as the mortgagee keeps up payments everything will be OK.
Fail to repay, though, and the bank may "retain their money for a further period," also using this kitty to pay off any arrears and cover the costs of repossession, should mum and dad not be there to pay the installments too. [Barclays Springboard]