Lend a Hand Savings Account
The Lend a Hand Savings Account pays a fixed rate of interest for 5 years. After the 5 year period the interest rate on the savings account will automatically become the same as the prevailing rate on our Sterling Call Account.
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Earn 4.25% interest paid annually for the next 5 years
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Help a loved one on the property
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Apply for a Lend a Hand mortgage at your local branch, or call us on:
01534 845436 or 01534 845269 Jersey
01481 706317 Guernsey
01624 697113 Isle of Man
01481 822340 Alderney
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Features & Benefits
You'll enjoy:
- a fixed interest rate of 4.25% AER/Gross for 5 years is payable on the required minimum balance of £10,000 and above,
- interest is paid annually.
How the account works:
One savings account can be opened per Lend a Hand Mortgage. The account can be in the name of one person, or it can be a joint account with up to two Helpers contributing together.
The savings are held as additional security for the mortgage by way of a security agreement. You can ask for the security agreement to be removed and your savings released (only if the 5 year period has expired) when the mortgage represents 90% or less of the property's value (provided the initial fixed rate period of the mortgage has expired at that time). The security agreement means that your savings could be used if the first-time buyer defaults on their mortgage payments. Please read the section 'About the security agreement' below for important information about the security agreement and what it could mean for your savings.
You can not make payments into or withdraw money from the account after it is opened, even in an emergency.
If the security agreement is released and the initial 5 year fixed-rate savings period has ended, the Lend a Hand Savings Account will be closed and your savings transferred to the account into which your interest has been paid.
If the security agreement is released before the end of the initial 5 year fixed-rate savings period, the Lend a Hand Savings Account must remain open for the remainder of the initial 5 years. Then, at the end of the initial 5 year period, it will become a Money Market Call account. Interest will be paid at the prevailing rate at that time.
You must open the savings account with the full amount that you want to contribute towards helping the first-time buyer.
So, if the first-time buyer has the minimum 5% cash deposit required, then you need to open the account with an amount equal to 20% of the property's value. If the first-time buyer has a bigger cash deposit, you can put less into the account. For example, if they have 10%, you would only need to put 15% of the property's value into the savings account.
To open an account you will need to visit a Lloyds TSB branch and you must be aged 18 or over and resident in the Channel Islands or Isle of Man. The Lend a Hand Savings Account can only be opened once the mortgage has been agreed.
About the security agreement:
Although you can't withdraw your savings during the 5 year fixed-rate savings period, you can ask for the security agreement to be released at the end of the initial 5 year fixed-rate mortgage period provided that the mortgage has reduced to 90% or less of the property's value at that time.
The 90% point could be reached either because the value of the property has gone up or the borrower has made repayments that have reduced the amount they owe. If property prices don't go up or there is a prolonged period of falling property prices, the security agreement may not be released for a significant period.
You and the first-time buyer need to ask to have the security agreement released and we may carry out a valuation of the property to establish whether the mortgage has fallen to 90% or less of what the property's worth. There's no security agreement for the first valuation but you or the first-time buyer will need to pay for any subsequent valuation.
If the borrower defaults on the mortgage while we have the security agreement over the savings, then we're entitled to take money from the savings account to make up the difference. In this situation you may not get your money back.
Likewise, if we're forced to repossess the property at any point while the security agreement is in place, but selling it doesn't raise enough money to pay back the loan, then we can also take money from the savings to make up the difference. Again, in this situation you would not get your money back.
Explanation of terms
GROSS RATE — The contractual rate of interest payable before deduction of income tax at the rate specified by law.
AER — stands for Annual Equivalent Rate and is the notional rate which illustrates the gross rate as if paid and compounded on an annual basis. As every advertisement for a savings product will contain an AER you can compare more easily what return you can expect from your savings over time.
How do I apply?