As the UK’s biggest online estate agent, we like to keep abreast of the latest news around mortgages – particularly when it comes to first time buyers.

First time buyers have had a rough ride recently. Not only are house prices at a near all-time high, but there are also fewer of them available and more competition. As a result, there has been a huge push to make sure those who want to, can get onto the property ladder. Whether it be a return of the 5% mortgage or the introduction of the Help to Buy scheme, there have been some incentives to help those struggling. However despite both the sector and the Government’s best efforts, there are still thousands of people eager to own a house who cannot due to the rising prices. However a Building Society in Leicestershire has taken a fresh approach – by bringing back the 100% mortgage, but with a difference.

At the end of last year, the Market Harborough Building Society announced plans to offer borrowers the opportunity to buy a home with zero deposit – providing their parents agree to use their home as security. Dubbed the ‘family assistance’ mortgage it allows first time buyers – as well as those purchasing a new home – the opportunity to borrow 100% of the value of the property, providing the borrower's parents permit a second mortgage to be taken out on their home (or any other property they own).

All of this may sound too good to be true, but there are a few catches:

Over both of the properties, the LTV (loan-to-value) cannot exceed 75% - meaning only those borrowers whose parents have a lot of equity in their home will be able to take advantage of the offer. This will filter out quite a few house hunters, even if their parents are keen to help.

Additionally, the interest rate is much higher than many mortgages on the market – standing at 3.99 percent. This compares to many first-time buyer mortgage rates of less than 2 percent for a 75 percent LTV.

The fees are also quite high, with the building society demanding a 0.5 per cent arrangement fee – with a minimum of £1,250 payable – and early repayment charges of 3% during the first three years.

Aside from the downsides, the idea does have legs. It allows parents to help their children out when it comes to getting on the property ladder – without the need to stump up a large amount of cash in one go. It’s also a great alternative to the pre-credit crunch 100% mortgage that left many in dire situations. However it’s important for buyers to remember that should they go down this path and they are not able to keep up with repayments, it could impact heavily on their parents and their homes.

What do you think of this new mortgage – would you take it on?

Are you looking for a property? Browse the homes available for sale on our website. We have houses located right around the country, and thanks to our reputation for selling property online fast, we can help match you with your perfect first house.

I Am The Agent work with some nifty mortage advisors, do call us on: 0333 4441007 or via email. mortgages@iamtheagent.com, if you would like some assistance or to see if we can help you find a great mortgage deal.