Skipton Building Society has launched a delayed start mortgage, aimed at first-time buyers (FTBs), with no repayments due for the first three months.
The product is intended to give buyers time to settle in and cover the costs of moving.
Research from Skipton found FTBs were spending upwards of £30,000 in the first three months after moving.
The study of 1,000 UK adults who bought a first home in the past five years showed 63% felt financially strained during that period, while 71% said the process cost more than expected.
Skipton reported buyers spent an average of £3,500 on furniture, £2,600 on kitchen appliances and £1,700 on removal companies.
Over a third said they were juggling costs for two properties due to overlap with rental agreements.
The study also revealed that 43% found it difficult to line up their move with the end of their lease, with 26% citing delays in the buying process.
61% said the financial impact took the shine off buying a home, and on average it took eight months to recover financially.
Jen Lloyd, head of mortgage products at Skipton, said: “Becoming a homeowner should be one of the most exciting milestones in someone’s life, however our research shows that first-time buyers are struggling and feel the cost associated with the move takes the shine off getting onto the property ladder.
“That’s why today I am pleased to announce the launch of Skipton Delayed Start mortgage, giving first time buyers some breathing space with no mortgage repayments due for the first 3 months.
“We hope that this product will help first time buyers settle into their new home and help ease the strain of the costs that come with buying first home that go beyond the deposit.”
Lloyd added: “At Skipton, we believe in fairness, that’s exactly why we’ve launched our new Delayed Start Mortgage – to give first-time buyers a fair start in their new home, and the breathing space they need in those critical first few months.”
Andrew Montlake, chief executive at Coreco Mortgages, said: “Yet again Skipton have delivered some innovation into the market backed by some careful research into what would most help first-time buyers.
“Delaying payments for three months can help take the pressure off in the early days when settling in and making a house a home is a top priority.
“Of course, this product will not suit everyone, and professional advice should be taken to fully understand the product, but it is yet another welcome option available to homebuyers that gives them choice.”
Montlake added: “We need more lenders to look at what a new generation of borrowers really need to get onto the housing ladder and any innovation should be welcomed into the market”.
The delayed start mortgage is available to FTBs only, with at least one applicant required to be a FTB.
The product offers up to 95% loan-to-value (LTV) and works with Skipton’s income booster.
No repayments are due for the first three months, but interest accrues from day one and is added to the balance.
Rates include a 2-year fixed at 4.87% for 90% LTV, and 5.20% for 95% LTV.
The 5-year fixed is 4.78% at 90% LTV and 5.00% at 95% LTV.
For new builds, 2-year fixed at 95% LTV is 5.40% and 5-year fixed at 95% LTV is 5.20%.
