Cool reception for Skipton's first-time deal

Cool reception for Skipton's first-time deal

Skipton building society's attempt to help first-time buyers get a foot on the ladder has met with a cool reception from the mortgage industry.

Its 'Mutually Exclusive' loan scheme offers a high 95 per cent loan-to-value (LTV) mortgage but in order to secure the deal, parents of the first-time buyer must first lock away savings equivalent to 20 per cent of the property's purchase price.

The savings will earn 4.85 per cent interest, and act as a guarantee against the mortgage - so should your offspring default on a payment, your savings will have to cover it. There will be no access to the savings while the loan-to-value stays at 95 per cent.

Buyers can pick from a range of rates and fees, including a three-year fix at 6.6 per cent, with a £995 fee. Skipton says Mutually Exclusive is for parents who want to help their children get on the property ladder, but don't want to give them a lump sum. But David Hollingworth, from mortgage brokers London & Country, says: 'Most parents would rather gift funds to their children so that they could have a bigger deposit, and therefore have a smaller mortgage or a better rate.' He recommends Nationwide's 95 per cent loan-to-value three-year fix, at 6.93 per cent, with a £299 fee.

Tracker with a difference

Borrowers taking out a Halifax tracker mortgage from Wednesday can switch to any of its fixed-rate loans within one year without penalty.

The lender's 'Rate.....continued below

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Guard' move is an effort to discourage homeowners from languishing on their lender's standard variable rate when they come to the end of their current mortgage deal. The feature is also open to first-time buyers who may be unsure about whether to go for a fixed rate or tracker. An equivalent to Rate Guard is offered by some other lenders but this is the first time a lender has allowed it to be used by all borrowers on its whole product range.

Train fares warning

A second round of 'simplification changes' that aims to clear up the confusing array of national rail tickets starts today - but some passengers could end up paying more than before.

In May, simpler fares were introduced for advanced bookings and 'walk-up' fares have now been overhauled. Open singles and open returns have been replaced by 'anytime' tickets while savers and cheap day returns have been changed to 'off-peak'. Some cheaper fares will be called 'super off-peak'.

The changes are meant to simplify the ticket process, but Passenger Focus, the rail consumer watchdog, says that some train operators have used the changes to bring in back-door fare increases and impose new restrictions, leaving some passengers worse off.

guardian.co.uk © Guardian Newspapers Limited 2008