Can I give my Son or Daughter a personal interest only loan to help them buy a property

ErictheUrn

My circumstances are such that I'm taking early retirement and will get a Tax free lump sum.  Can I use this to give my adult children a pseudo family interest only Mortgage/Loan so that they can afford to buy a property?  I cannot afford to give them the amount as a gift but am looking at this as a way to help them out and at the same time provide me with a better interest rate than placing the capital in a bank savings account, whilst at the same time providing them with a better interest rate and more affordable monthly payments than they could otherwise afford.   Obviously the loan agreement would need to be drawn up legally.
What are the Forums thoughts?

K_S

@erictheurn You could provide a loan to your children to help them towards a deposit for a mortgage. However, having an unsecured family loan contributing to the deposit will severely restrict the pool of lenders that will potentially lend in such a scenario.

There might be other options available to use your lump sum cash to help them get a mortgage, but without giving up control of it.

davidmcn

Do you mean as an alternative to them getting a regular mortgage, or in addition to one? If the latter then it becomes more complicated as lenders don't really like the "deposit" being borrowed.

jay1804

ErictheUrn said:

My circumstances are such that I'm taking early retirement and will get a Tax free lump sum.  Can I use this to give my adult children a pseudo family interest only Mortgage/Loan so that they can afford to buy a property?  I cannot afford to give them the amount as a gift but am looking at this as a way to help them out and at the same time provide me with a better interest rate than placing the capital in a bank savings account, whilst at the same time providing them with a better interest rate and more affordable monthly payments than they could otherwise afford.   Obviously the loan agreement would need to be drawn up legally.
What are the Forums thoughts?

You could look at Barclays Springboard Mortgage, although rates are higher for the borrower.

https://www.barclays.co.uk/mortgages/family-springboard-mortgage/?campaign=Google-PPC-Mortgages&chnnl=PSB&gclid=CjwKCAiAi_D_BRApEiwASslbJyKJfCqlqKYQGn8vQRxLn5-fhJ7pJRDwVj8GRG_6ZqH78PPNxcwlMhoCH00QAvD_BwE&gclsrc=aw.ds

dimbo61

Helping the kids is very popular and sometimes essential in the current climate.
Now your kids may have already saved a deposit which you could top up.
LISA ISA,s means if they have £4,000 saved each tax year the government adds £1,000. So £8,000 from parents over next 2/4 months could become £10,000 in a LISA.
Now check out YBS offset mortgage and friends and family.
You could open an Offset savings account and help offset your kids mortgage.
You keep control of your money 

Thrugelmir

Lenders aren't going to accept a formal loan arrangement. Money will need to be gifted. Or has been suggested already a structured product.