Metro Bank has introduced a new mortgage product enabling purchasers to borrow up to 100% of a property's value – on condition that a close relative agrees to share liability for the debt. The bank has launched a Joint Borrower Sole Proprietor mortgage targeted chiefly at first-time buyers who are struggling to accumulate a deposit, offering loans exceeding 95% and extending to the full value of a property.
How the Mortgage Works
Purchasers must convince an immediate family member – such as a parent or grandparent – to sign on as a joint borrower, rendering them legally liable for the mortgage payments should the homeowner fall into arrears or experience deteriorating financial circumstances. Unlike a conventional joint mortgage, the family member will not acquire any ownership stake in the property. Rather, they serve as a financial guarantee, with the purchaser retaining sole legal ownership while both parties remain jointly liable for the mortgage debt.
The development arrives as skyrocketing property prices and stricter affordability criteria continue to force many prospective homeowners to depend on the so-called 'Bank of Mum and Dad' to secure a foothold on the property ladder.
Eligibility and Terms
Metro Bank confirmed the product is also open to existing homeowners, subject to eligibility checks. The joint borrower must be a direct family member, such as a spouse, parent, grandparent, child or grandchild, and is required to have their own earned income rather than depending solely on a pension or state benefits. The mortgages are offered as five-year fixed-rate deals with repayment terms ranging from five to 35 years. Neither product fees nor valuation fees apply. However, the deal is unavailable on new-build properties or homes situated above commercial premises.
Charles Morley, Director of Mortgage Distribution at Metro Bank, said: "For many first-time buyers today, getting on the property ladder can feel impossible, and family members often want to do anything they can to help. Acting as a Joint Borrower provides a way for immediate family to be that support without watering down the ownership of the property or being asked to provide a deposit. At Metro Bank we understand the importance of lending responsibly while continuing to be innovative and challenging, and we've carefully developed our mortgage product with this in mind."
Application and Assessment
All applicants will be provided with specialist mortgage guidance prior to taking out the loan, regardless of whether they apply directly or via a broker. Metro Bank emphasised that both the primary borrower and the supporting family member will be thoroughly assessed under its affordability criteria and enhanced eligibility checks before any loan is sanctioned.
Market Context
The launch demonstrates increasing innovation amongst lenders as they seek methods to assist purchasers in overcoming one of the greatest obstacles to home ownership - securing a deposit while also satisfying increasingly stringent affordability assessments. While 100% mortgages largely vanished following the financial crisis, lenders have progressively started reintroducing products aimed at helping creditworthy borrowers with minimal or no deposit, frequently by requesting family members to provide additional financial backing or guarantees.
Consumer experts suggest such schemes can offer a valuable pathway onto the property ladder, but families ought to carefully weigh up the risks before committing, as joint borrowers remain responsible for the debt if the homeowner fails to maintain repayments.
