Calling all first time buyers! Halifax has launched a new no-deposit mortgage

Halifax has followed Barclays’ and Lloyds’ lead with a brand-new Halifax no-deposit mortgage.

Related: Martin Lewis has an urgent warning for wannabe first-time buyers

However, before you get too excited, when we say no-deposit, what we mean is that a family member will have to cough up 10 per cent of the property price in place of you putting down a deposit.

How the Halifax no-deposit mortgage works

The three-year mortgage is only available to first-time buyers, and you or the supporting family member will need to already be a Halifax member. However, if you meet those requirements you can apply for the Halifax family boost mortgage.

Your well-meaning family member puts 10 per cent of the agreed property purchase price into a Family Boost Fixed Savings Account. This money then acts as security for your mortgage.

The Family Boost mortgage is a three year, fixed-rate deal at 2.9 per cent and is up to a value of £500,000. There is the bonus perk of no added fees and your family member who lent the money will get £300 cashback.

When the three years are up, your family members will be able to get their savings back with 2.5 per cent interest annually as long as you have kept up with the payments.

According to Legal & General, the bank of mum and dad has coughed up an average of £24,100 this year with no guarantee of seeing the money repaid. So the Halifax Family Boost Fixed Savings Account could be the answer to your parent's prayers if you are relying on them to help with the deposit.

However, if you were planning to purchase a property under a Help to Buy, shared equity, shared ownership or Right to Buy scheme, you won’t be able to apply for this mortgage.

How it measures up to other no-deposit mortgages

The mortgage is similar to Lloyds Bank’s deal. They both offer a fee-free three-year mortgage. However, Lloyds’ version is set at 2.99 per cent, and has the same savings rate.

In contrast, Barclay’s no-deposit mortgage is fixed over five years at a rate of 2.95 per cent. The savings rate is currently lower, set at 2.25 per cent.

Related: There's a way for first-time buyers to get a house without a mortgage – but would you do it?

So if you’re still struggling to pull together a deposit you may want to start sweet-talking your family.