Shared appreciation mortgages 'suit first-time buyers'

Shared appreciation mortgages can help people to get on to the property ladder, according to one financial adviser.

Such products can be particularly suitable for first-time buyers or people with poor credit ratings, Zen Financial Services say.

According to Mortgages Exposed, shared appreciation mortgages are a relatively new product that were first initiated by the Bank of Scotland in late 1996.

Usually, the arrangement takes the form of the bank advancing 25 per cent of the value of the property, interest free.

In exchange, the bank takes 75 per cent of the appreciation of the property''s value when the owner dies or sells up.

Mike Pendergast, spokesperson for Zen Financial Services, says shared appreciation mortgages can be useful "for first-time buyers and particularly in areas where it can be more expensive for first-time buyers to get on the market".

back