Persimmon offers interest-free deposit boost for buyers

A new program aims to help first-time buyers and those looking to move homes by providing an interest-free deposit boost. This initiative is launched by mortgage lender Gen H in collaboration with housebuilder Persimmon. It offers a 15% interest-free boost to buyers who put down a 5% deposit on homes from over 130 Persimmon sites across the UK. Many first-time buyers have struggled to find affordable options since the government’s Help to Buy scheme ended in March 2023. A report from Halifax shows that the number of first-time buyers in London dropped by 8% in the last decade. With this new scheme, a buyer of a £400,000 home would only need to pay a £20,000 deposit and would receive an additional £60,000 interest-free to assist with their mortgage. The new boost lasts for the lifetime of the mortgage, potentially up to 40 years. Unlike Help to Buy, where repayment was tied to the property’s value after the first five years, this boost can be repaid at cost within the first five years. This means buyers have more flexible options if they wish to pay it back early. Gen H aims to simplify the mortgage process by allowing users to manage their boost and mortgage through one application. This provides a streamlined experience compared to the previous Help to Buy, which involved additional fees and paperwork. There are currently no management fees with this new product. The eligibility criteria are also designed to be more inclusive. For instance, the minimum income for a single buyer is £18,000. Buyers can also include those who are self-employed or have complex financial situations. While the current interest rate for this scheme is slightly higher than standard rates for similar mortgages, the overall borrowing terms can still be favorable due to the interest-free boost. The program is primarily available for Persimmon Homes now, but there are plans to expand it to other developers. This effort aligns with Labour's commitment to build 1.5 million homes in the next five years and reflects a broader push to improve access to homeownership for those with limited financial support.