Broker tempts nurses onto housing ladder

Deal is aimed at teachers, police, firemen and other 'key' workers

Key sector workers are being offered a home loan which will lend up to five times salary, in a bid to help them get on the property ladder.

We would have some concerns about nurses entering into such a big mortgage of five times their salary

Royal College of Nursing

Lenders typically offer a mortgage of around 3.5 times a person's income, which restricts many workers on low to average earnings.

To qualify, applicants must earn at least £20,000.

The MarketPlace said that offering such a high multiple was not irresponsible, because the lowest mortgage rates for 40 years made home loans very affordable.

Face-to-face advice involving an assessment of whether applicants could keep up with payments both now and in the future, would ensure people were not overstretched, the broker said.

But the Royal College of Nursing, said that it had concerns about whether nurses could sustain a very big mortgage commitment over the long-term.

A spokesman said: "We would have some concerns about nurses entering into such a big mortgage of five times their salary."

Foot on the ladder

The mortgage is a five-year stepped mortgage deal and is also on offer to young professionals.

Interest rates are fixed on a yearly basis, and start 4.95%, increasing by half a percentage point each year to 6.95% in the fifth year.

This is the equivalent of an average of 5.95% over the five year term.

There are redemption penalties within the five year period, which means that borrowers are locked-in within that period, but there are no charges thereafter.

Ian Darby, group commercial director, said: "The well-documented recent surge in house prices has made it difficult for many first-time buyers to get into the property market.

"Subject to affordability, this product provides the potential for young professionals and key service workers... who have been particularly hard hit by recent increases in house prices, to get a foot on the ladder."