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FIRST START MORTGAGE

Boost your borrowing power

First Start is a unique mortgage which allows a close relative to act as your sponsor, and help you get the home you really want.

Post Office Money® Mortgages are provided by Bank of Ireland UK

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Is First Start right for me?

  • If you have saved enough deposit, but are limited on how much you could borrow, we can include a family member's income in your assessment
  • If you need to get back on the property ladder after a change in circumstances, a sponsor could help you buy the home you really want
  • We recommend independent financial, legal and tax advice is taken in all cases

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE


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How does it work?

Income assessment

Please read this in conjunction with the important information below.

We include your sponsor's income in your assessment. We calculate how much you can borrow based on your combined incomes. The maximum loan is £500,000.

Co-borrower Mortgage

You borrow together and are both liable for the total loan and monthly repayments. There is an additional option for the sponsor to become a joint owner of the property.

What does this mean?

Time to move in

Direct debits must be made from one account, but you can decide on the contribution split between the buyer and the sponsor.

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First Start compared to borrowing on your own

Please note: The examples below are based on the incomes stated with no debts or commitments. Each customer’s circumstances may vary. An individual affordability assessment will determine how much you can borrow. Affordability is worked out using the combined incomes of the sponsor and the highest earning applicant.

Borrowing on your own

1

Your ideal property costs

£300,000

2

You have saved £15,000 deposit so will need to borrow £285,000

3

With your annual income of

£25,000

4

You could borrow a total of

£112,250

Borrowing with First Start

1

Your ideal property costs

£300,000

2

You have saved £15,000 deposit so need to borrow £285,000

3

With your annual income of

£25,000

plus sponsor's annual income of

£50,000

4

You could borrow a total of

£285,000

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Important information

Buyer's Basic Criteria

  • Your sponsor must be a close relative, normally a parent or step-parent
  • For joint applications, we only assess the highest earning applicant and the sponsor for affordability.
  • You cannot own any other property at the time of completion. This includes any investment property.
  • You need to earn a minimum of £20,000 per annum
  • Direct debits must be made from one account, but you can decide on the contribution split between you and your sponsor.
  • You will require a minimum 5% deposit
  • The maximum age for applicants is 75 years at the end of the mortgage
  • The maximum mortgage term is 35 years

Buyer's Considerations

  • Both you and your sponsor are individually and jointly liable for the monthly repayments and total loan

Sponsor's Basic Criteria

  • We recommend independent financial, legal and tax advice is taken in all cases
  • You must get independent legal advice before completion if you choose not to be registered as a joint owner
  • You must be older than 18 and under 60 years old when you take out the mortgage, and cannot be older than 80 years old at the end of the mortgage term.
  • You must be employed with a minimum income of £30,000 per annum and a homeowner.

Sponsor's Considerations

  • Both you and the buyer are individually and jointly liable for the monthly repayments and total loan.
  • If you become a co-owner, you may be subject to an additional 3% stamp duty and land tax on your second residential property.
  • As a co-borrower the First Start mortgage will be used in future affordability calculations. This will be considered if you need to remortgage your own home.
  • Being removed from the mortgage could affect your tax situation. We recommend you take independent tax advice.
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Our Mortgage product rates

View the range of mortgage rates available for First Start

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Compare First Start with other products

First Start Mortgage

  • Boosts your borrowing power enabling you get the home you really want.
  • Uses a family member’s income as well your own to assess your affordability.

Post Office Family Link™ Mortgage

  • A way for your parents to help fund your deposit without using their savings.
  • Involves two fixed rate mortgages, one to cover your deposit and one to cover the remaining property value.

Traditional Mortgage

  • Assessment focuses solely on your income and ability to fund a deposit.
  • There is a choice between fixed rate and tracker mortgages.
  • A minimum 5% deposit would be required in order to be considered.
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With you, each step of the way

We want to make sure this is right mortgage for you, so we will give you free professional advice before you apply and throughout the process.

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First Start FAQs

What if the sponsor wants to leave the mortgage?

There may come a time when the sponsor wants, or needs, to be removed from the mortgage.

If so, we would treat this as a remortage with associated costs. You would need to meet our standard lending and affordability criteria in order to take on the mortgage on your own.

However, it’s worth noting that both you and the sponsor would need to agree for the sponsor to be removed from the mortgage. As this could affect the sponsor’s tax situation, we highly recommend getting independent financial, tax and legal advice.

What is independent legal advice?

If the sponsor chooses not to be registered as a joint owner we’ll need evidence that the sponsor has had independent legal advice before completion.

Independent legal advice is advice from a solicitor who’s acting solely for the sponsor, and not involved in the purchase of the property.

The solicitor giving independent legal advice needs to be in a different firm or must have at least equal standing to the solicitor overseeing the conveyancing work. This means that if the conveyancing solicitor is a partner in the same firm, then the independent legal advice needs to be given by another partner of that firm.

What are the tax considerations?

We recommend you receive independent financial and tax advice to understand the below tax implications and how they may impact you.

Stamp duty land tax

Buyers of additional residential properties, such as second homes, need to pay an extra 3% in stamp duty. This will apply to sponsors if they decide to be a registered owner at the Land Registry.

Capital gains tax

Anyone selling an additional property may need to pay capital gains tax on any profit. This includes jointly owned properties.

Inheritance tax

An additional property would form a part of a deceased estate for inheritance tax purposes if jointly owned.

Who can be a sponsor?

A sponsor is a close relative, normally a parent or step parent, who is added as a co-borrower.

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Contact us or apply

Apply online with advice

We will give you a call during the application process to make sure this product is right for you.

Arrange a call back

Select a time that suits you and we'll give you a call back

Call us on

0800 707 6206
We are available 8.30am - 7.30pm Mon - Fri and 9.00am - 1.30pm Sat

Small print

Subject to status and lending criteria. Written illustrations available upon request. Borrowers must be aged 18 or over.

 

Post Office Money® Mortgages are provided by Bank of Ireland (UK) plc. Post Office Limited is an appointed representative of Bank of Ireland (UK) plc which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Post Office Limited is registered in England and Wales. Registered Number: 2154540. Registered Office: Finsbury Dials, 20 Finsbury Street, London, EC2Y 9AQ. Post Office Money® and the Post Office Money® logo are registered trademarks of Post Office Limited. Our FCA Register Number is 409080. You can confirm our registration on the FCA's website (www.fca.org.uk) or by contacting the FCA on 0800 111 6768.