Lend a Hand Savings Account

The Lend a Hand Savings Account pays a fixed rate of interest for 42 months. After the 42-month period the interest rate on the savings account will automatically become a variable rate which tracks at a percentage below the Bank of England base rate.

Features & Benefits

You’ll enjoy:

• a fixed interest rate of 4.10% AER/Gross for 3½ years (42 months) is payable on the required minimum balance of £2000 and above followed by a variable rate which tracks at 0.50% below the Bank of England base rate; view Lend a Hand Savings Account interest rate, 
• interest paid monthly.
  

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 legal charge (or a guarantee in Scotland). You can ask for the charge to be removed and your savings released (only if the 42 month 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 charge (or guarantee) means that your savings could be used if the first-time buyer defaults on their mortgage payments. Please read the section ‘About the legal charge’ below for important information about the legal charge (or guarantee) 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 charge is released and the initial 42 month 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 charge (or guarantee) is released before the end of the initial 42-month fixed-rate savings period, the Lend a Hand Savings Account must remain open for the remainder of the initial 42 months. Then, at the end of the initial 42 month period, it will be closed and the balance transferred to the account into which your interest has been paid.

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 UK. The Lend a Hand Savings Account can only be opened once the mortgage has been agreed.

The interest on your savings, which is paid monthly, must be paid into an eligible Lloyds TSB savings or current account.

About the legal charge (or guarantee in Scotland):

• Although you can’t withdraw your savings during the 42-month fixed-rate savings period, you can ask for the legal charge (or guarantee) to be released at the end of the initial 3-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 legal charge (or guarantee) may not be released for a significant period.
• You and the first-time buyer need to ask to have the charge (or guarantee) 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 charge for the first valuation but you or the first-time buyer will need to pay for any subsequent valuation. The valuation will be charged at our standard valuation fee at that time. See our valuation fees. 
• If the borrower defaults on the mortgage while we have the charge (or guarantee) 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 charge (or guarantee) 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
AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. As every advertisment for a savings product, which quotes an interest rate, will contain an AER you will be able to compare more easily what return you can expect from your savings over time. Gross rate is the contractual rate of interest payable before the deduction of income tax at the rate specified by law.

How do I apply?