British high street bank increases the multiple of earnings against which people can borrow on its ‘family springboard’ mortgage

The no-deposit mortgage has returned, with Barclays removing the need for buyers to put down any deposit when buying a home using its “family springboard” mortgage.

The deal had previously allowed people to climb on to the property ladder with a 5% deposit, provided that a “helper” – often the home buyer’s parents – puts cash equating to 10% of the house purchase price into a savings account linked to the mortgage.

Under the new deal, only the 10% contribution from parents is needed. This cash will be returned to the borrower’s parents after three years with interest added – provided borrowers have kept up with their mortgage repayments.

The lender has also raised the maximum amount that home buyers can potentially borrow as a multiple of their income under the deal. Customers with an income of more than £50,000 will be able to borrow up to 5.5 times their income, up from a maximum multiple of 4.4.

A buyer without a deposit could get a three-year fixed rate of 2.99% under the family springboard mortgage, but one with a 5% deposit could get a three-year rate of 2.79%.

Parents putting cash into a savings account – called a “helpful start” account – will receive an interest rate under the deal of 2% (the Bank of England base rate plus 1.5%).

Barclays 100% mortgage: how much does it really help homebuyers? Read more

The need to raise a hefty mortgage deposit is often cited as a major barrier holding people back from getting on the property ladder. The government has introduced various schemes under the banner of Help to Buy, which enable people to move on to or up the property ladder with a 5% deposit.

Barclays said recent research found that 35% of prospective first-time buyers are forced into asking their parents for help getting a mortgage. Of these, 20% who accept help see the money as a gift that does not need to be paid back.

A separate survey from credit checking company Experian recently found that 27% of Britons aged 55 and over had given financial support to their child or someone else to help them buy their own property, even though 15% of them said they were “not at all” financially comfortable themselves.

Another report, from Legal & General, found the “bank of mum and dad” is expected to be involved in one in four property purchases in the UK housing market in 2016.