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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
  • Please note these rates are only available for new borrowers and are correct as of 01/11/2018

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.

Our First Start Mortgages

After the initial rate period, all of our mortgages revert to the Bank of England Base Rate (currently 0.75%) plus 3.99% for the rest of the term

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15% deposit (85% loan to value)

Compare our fixed rate 85% mortgages

2 year fixed

until 31/01/2021

With additional benefits and cashback

Product fee
£995
Initial rate
2.00%
Overall cost for comparison
4.3% APRC

Early repayment details

If you fully repay your mortgage before the end of your agreed term, you will pay:

  • 3% of the sum repaid until 31/01/2020
  • 2% of the sum repaid until 31/01/2021

Overpayment details

You can overpay up to 10% of your outstanding mortgage balance each year without incurring any charges.

Followed By Rate

Bank of England Base Rate (currently 0.75%) plus 3.99% for the rest of the term.

Notes and additional benefits

  • £400 cashback paid to solicitor with advance
  • Standard Valuation Fee paid by Lender
  • Minimum loan £50,000

Still unsure? Call us

0800 707 6206
  • 8.30am - 7.30pm Monday - Friday
  • 9am - 1.30pm Saturday
  • Closed on Sundays

5 year fixed

until 31/01/2024

With additional benefits and cashback

Product fee
£0
Initial rate
2.77%
Overall cost for comparison
4.0% APRC

Early repayment details

If you fully repay your mortgage before the end of your agreed term, you will pay:

  • 4% of the sum repaid until 31/01/2021
  • 3% of the sum repaid until 31/01/2023
  • 2% of the sum repaid until 31/01/2024

Overpayment details

You can overpay up to 10% of your outstanding mortgage balance each year without incurring any charges.

Followed By Rate

Bank of England Base Rate (currently 0.75%) plus 3.99% for the rest of the term.

Notes and additional benefits

  • £400 cashback paid to solicitor with advance
  • Standard valuation fee paid by Lender
  • Minimum loan £50,000

Still unsure? Call us

0800 707 6206
  • 8.30am - 7.30pm Monday - Friday
  • 9am - 1.30pm Saturday
  • Closed on Sundays
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Representative example:

This is not based on your details, it just an example to show how repayments might work for this kind of mortgage.

A mortgage of £162,245 payable over 24 years initially on a fixed rate for 2 years at 2.00% and then reverting to our tracker rate of 3.99% above Bank of England Base Rate for the remaining 22 years would require 24 monthly payments of £710 and 264 monthly payments of £925.

The total amount payable would be £262,485 made up of the loan amount plus interest (£99,035), product fee (£995), valuation fee (£0), funds transfer fee (£15), legal fee (£0) and lending fee (£195). The overall cost for comparison is 4.4% APRC representative.

Or in other words...

If you have a mortgage of £162,245 over 24 years

You will start paying a fixed rate of 2.00% for 2 years

You then pay a rate of 4.74% for the remaining 22 years

...and after 24 years, you will have paid £262,485

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10% deposit (90% loan to value)

Compare our fixed rate 90% mortgages

2 year fixed

until 31/01/2021

With additional benefits and cashback

Product fee
£0
Initial rate
2.38%
Overall cost for comparison
4.4% APRC

Early repayment details

If you fully repay your mortgage before the end of your agreed term, you will pay:

  • 3% of the sum repaid until 31/01/2020
  • 2% of the sum repaid until 31/01/2021

Overpayment details

You can overpay up to 10% of your outstanding mortgage balance each year without incurring any charges.

Followed By Rate

Bank of England Base Rate (currently 0.75%) plus 3.99% for the rest of the term.

Notes and additional benefits

  • £400 cashback paid to solicitor with advance
  • Standard valuation fee paid by Lender
  • Minimum loan £50,000

Still unsure? Call us

0800 707 6206
  • 8.30am - 7.30pm Monday - Friday
  • 9am - 1.30pm Saturday
  • Closed on Sundays

5 year fixed

until 31/01/2024

With additional benefits and cashback

Product fee
£0
Initial rate
2.87%
Overall cost for comparison
4.0% APRC

Early repayment details

If you fully repay your mortgage before the end of your agreed term, you will pay:

  • 4% of the sum repaid until 31/01/2021
  • 3% of the sum repaid until 31/01/2023
  • 2% of the sum repaid until 31/01/2024

Overpayment details

You can overpay up to 10% of your outstanding mortgage balance each year without incurring any charges.

Followed By Rate

Bank of England Base Rate (currently 0.75%) plus 3.99% for the rest of the term.

Notes and additional benefits

  • £400 cashback paid to solicitor with advance
  • Standard valuation fee paid by Lender
  • Minimum loan £50,000

Still unsure? Call us

0800 707 6206
  • 8.30am - 7.30pm Monday - Friday
  • 9am - 1.30pm Saturday
  • Closed on Sundays
circle-outline icon person icon house-part-filled icon house-filled icon house-with-person icon

Representative example:

This is not based on your details, it just an example to show how repayments might work for this kind of mortgage.

A mortgage of £145,000 payable over 26 years initially on a fixed rate for 2 years at 2.38% and then reverting to our tracker rate of 3.99% above Bank of England Base Rate for the remaining 24 years would require 24 monthly payments of £624 and 288 monthly payments of £796.

The total amount payable would be £244,387 made up of the loan amount plus interest (£99,177), product fee (£0), valuation fee (£0), funds transfer fee (£15), legal fee (£0) and lending fee (£195). The overall cost for comparison is 4.4% APRC representative.

Or in other words...

If you have a mortgage of £145,000 over 26 years

You will start paying a fixed rate of 2.38% for 2 years

You then pay a rate of 4.74% for the remaining 24 years

...and after 26 years, you will have paid £244,387

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5% deposit (95% loan to value)

Compare our fixed rate 95% mortgages

2 year fixed

until 31/01/2021

With additional benefits and cashback

Product fee
£0
Initial rate
3.52%
Overall cost for comparison
4.6% APRC

Early repayment details

If you fully repay your mortgage before the end of your agreed term, you will pay:

  • 3% of the sum repaid until 31/01/2020
  • 2% of the sum repaid until 31/01/2021

Overpayment details

You can overpay up to 10% of your outstanding mortgage balance each year without incurring any charges.

Followed By Rate

Bank of England Base Rate (currently 0.75%) plus 3.99% for the rest of the term.

Notes and additional benefits

  • £400 cashback paid to solicitor with advance
  • Standard valuation fee paid by Lender
  • Higher lending charge paid by Lender
  • Minimum loan £50,000

Still unsure? Call us

0800 707 6206
  • 8.30am - 7.30pm Monday - Friday
  • 9am - 1.30pm Saturday
  • Closed on Sundays

5 year fixed

until 31/01/2024

With additional benefits and cashback

Product fee
£0
Initial rate
3.72%
Overall cost for comparison
4.4% APRC

Early repayment details

If you fully repay your mortgage before the end of your agreed term, you will pay:

  • 4% of the sum repaid until 31/01/2021
  • 3% of the sum repaid until 31/01/2023
  • 2% of the sum repaid until 31/01/2024

Overpayment details

You can overpay up to 10% of your outstanding mortgage balance each year without incurring any charges.

Standard variable rate

Followed by Bank of England Base Rate (currently 0.75%) plus 3.99% for the rest of the term.

Notes and additional benefits

  • £400 cashback paid to solicitor with advance
  • Standard valuation fee paid by Lender
  • Higher lending charge paid by Lender
  • Minimum loan £50,000

Still unsure? Call us

0800 707 6206
  • 8.30am - 7.30pm Monday - Friday
  • 9am - 1.30pm Saturday
  • Closed on Sundays
circle-outline icon person icon house-part-filled icon house-filled icon house-with-person icon

Representative example:

This is not based on your details, it just an example to show how repayments might work for this kind of mortgage.

A mortgage of £145,000 payable over 26 years initially on a fixed rate for 2 years at 3.52% and then reverting to our tracker rate of 3.99% above Bank of England Base Rate for the remaining 24 years would require 24 monthly payments of £710 and 288 monthly payments of £803.

The total amount payable would be £248,446 made up of the loan amount plus interest (£103,236), product fee (£0), valuation fee (£0), funds transfer fee (£15), legal fee (£0) and lending fee (£195). The overall cost for comparison is 4.6% APRC representative.

Or in other words...

If you have a mortgage of £145,000 over 26 years

You will start paying a fixed rate of 3.52% for 2 years

You then pay a rate of 4.74% for the remaining 24 years

...and after 26 years, you will have paid £248,446

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Compare First Start with other products

First Start Mortgage

  • Boosts your borrowing power enabling you to 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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Definitions

Approval in Principle (AIP)

An AIP indicates how much you could borrow based on the information you have provided, it performs various criteria and credit reference agency checks, and gives a conditional decision to lend based on its findings.

APRC

Annual Percentage Rate of Charge - this shows the overall cost of borrowing, taking into account the term, interest rate and other costs.

Higher Lending Charge

A fee which may be charged if the amount borrowed is more than a given percentage of the value of the property. The lender will use the fee for an insurance policy to protect them against financial loss in the event of a borrower not meeting their mortgage payments. The fee is usually payable in full up front. You may be liable for any mortgage shortfall debt if after possession the sale proceeds are not enough to repay your outstanding debt. Choose a Post Office Money mortgage and the Higher Lending Charge is paid by the lender for mortgages above 75% LTV. No Higher Lending Charge is payable for mortgages up to 75% LTV. See the Lending Criteria for more information.

Loan to Value (LTV)

It’s the amount of mortgage expressed as a percentage of the value of the property or purchase price, whichever is lower. For example, a mortgage of £80,000 on a purchase price of £100,000 would be 80% LTV. If the valuation of the property is lower than the price you've agreed, the LTV will be based on the valuation.

No product fee

There is no product fee to pay. This is ideal if you do not want to pay a product fee or add one to your mortgage.

Overall cost for comparison

The total cost of a loan, including interest charges and product fees, shown as a percentage rate. The calculation assumes that you keep the mortgage for the full term. APRC is the industry standard calculation and allows you to directly compare mortgages from all lenders.

Product fee / Standard legal fees

Product fee: This is a fee charged on some mortgages as part of the product. It can be paid upfront or added to the loan. If you add it to your mortgage it will increase your outstanding balance and interest will be charged for the duration of the mortgage.

Standard legal fees: If your mortgage states that standard legal fees are paid by the lender, the lender will pay the fees if you use their nominated solicitors. Terms and conditions apply, additional legal work may incur additional fees, please refer to the General Lending Criteria for full details.

Standard legal fees

If your mortgage states that standard legal fees are paid by the lender, the lender will pay the fees if you use their nominated solicitors. Terms and conditions apply, additional legal work may incur additional fees, please refer to the General Lending Criteria for full details.

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Contact us or apply

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Ways to apply

Find out what you will need when applying online or by phone

Call us on

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

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.