Lender to help remortgage gifting for first time buyers

April Mortgages has improved its capital raising criteria, to make it easier for borrowers looking to raise additional capital for gifting purposes when remortgaging.

Gifting has become increasingly significant within the UK mortgage market. Saving a sufficient deposit is more challenging as a result of house price growth, while potential buyers have seen their budgets come under pressure from rising household bills. As a result substantial numbers of aspiring buyers now rely on financial support from loved ones to supplement their existing deposit saving.

According to research from Legal & General, more than 314,000 house purchases in 2023 were supported by the ‘Bank of Mum and Dad’, with gifts averaging over £25,000.

Borrowers will be able to borrow up to 4.5 times their income for gifting purposes.

The expansion of eligible reasons for capital raising follows April Mortgages’ increase of maximum loan-to-income (LTI) caps to up to six times income for first-time buyers. Higher LTI caps allow April Mortgages to bring its badly-needed products to greater numbers of borrowers, particularly first-time buyers, delivering certainty for a truly longer period.

April Mortgages is establishing itself within the mortgage market, through its range of five to 15 year fixed rate mortgages, available up to 95% loan to value. As the borrower drops into a lower LTV band, for example through the repayment of the mortgage or house price growth, their rate will reduce accordingly, providing them with even more peace of mind.

A spokesperson for April Mortgages says: “Home ownership has become harder to achieve for would-be buyers in recent years, as it has become more challenging to save the required deposit. April Mortgages is passionate about supporting first-time buyers, and by expanding our capital raising criteria we are making it easier for loved ones to gift deposits while also benefiting from the vital peace of mind our products provide.

“Combined with our LTI caps increase for first-time buyers, April Mortgages is helping more borrowers to not only purchase a home but stay in it for the long term.”