5% Deposit Mortgage – Proportunity FAQ
Maybe you only have a 5% deposit for a mortgage and you want to buy a property, or perhaps you are not a first time buyer, or don’t want a new build home. If the answer to any of these questions is yes, Proportunity could be for you.
What is Proportunity 5% deposit mortgage?
Proportunity is an equity loan designed to provide a bigger deposit to buy a home. Effectively, it enables you to buy a property with a 5% deposit mortgage.
Proportunity is basically a second mortgage and is available on any property. It is available to everyone; home movers and first time buyers.
Commonly, New builds are considered to be overpriced. Luckily, Proportunity allows you to select from a wider range of properties to find a fair value home. What’s more, the home is 100% yours from day one so you do not pay rent.
Contact Us to start your Proportunity journey.
See our main Proportunity page here: Proportunity
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How does Proportunity work?
Similarly to Help to Buy, Proportunity is an equity loan. So, you need a minimum of a 5% deposit and Proportunity tops up your deposit by a maximum of 25%. Therefore, your total deposit can be up to 30%. This can help get you a 5% deposit mortgage or secure a lower mortgage interest rate.
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Do I need a mortgage advisor to take a 5% deposit mortgage with Proportunity?
Yes. You can only take a Proportunity equity loan through a qualified mortgage advisor. Firstly, the mortgage broker will check if you are eligible for the equity loan and make the application on your behalf. Following this, they will also handle your main mortgage application and see the property purchase through to completion.
Contact Us to explore your options.
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When do I have to repay my Proportunity loan?
The equity loan is repayable at the end of the main mortgage term. Therefore, the Proportunity loan term will be the same as your main mortgage. You can pay it off earlier if you prefer.
The Proportunity loan has a fixed rate of interest for the first 5 years. Your mortgage broker will discuss the interest rate available with you.
Why is the Proportunity interest higher than the mortgage?
A standard formula is used to calculate the APR (annual percentage rate). Basically, this enables customers to compare loan products easily and clearly. Without doubt, as a standalone product, the Proportunity APR is higher than many other mortgage products. However when combined with a main mortgage product, the overall loan can have a lower cost to the home buyer.
Contact Us to find out more.
What is the maximum loan to value (LTV) for my mortgage with Proportunity?
The maximum loan to value is 85%. This means the maximum main mortgage can be 85% of the value of the property. As such, you will need a 5% deposit and Proportunity can provide a minimum of a 10% deposit. This enables you to buy a property with a 5% deposit mortgage.
See if your property is eligible: Contact Us
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Can I use Proportunity loan if I am self-employed?
Yes. Proportunity is available to employed and self-employed applicants. To clarify, Self-employed applicants will ideally need 2 years trading accounts and tax returns. Although, applications can be considered from those who have been trading for less than 2 years on a case-by-case basis. Contact Us to discuss your situation.
Speak to a self-employed expert here: Contact Us
Is Proportunity 5% deposit mortgage safe?
Proportunity is authorised and regulated by the Financial Conduct Authority (716565). Proportunity is backed by large institutional investors such as Savills and Starwood Capital. The main mortgage is provided by highstreet lenders such as Halifax, Kensington and The Tipton.
Unsurprisingly, many home hunters have already used Proportunity to buy their dream home. Check out their trustpilot reviews here: Trustpilot Review
Can I use my Help to Buy ISA / LISA savings with a Proportunity loan?
You can use ISA and LISA savings towards your 5% deposit to buy a home with Proportunity. Bonuses on ISA and LISA savings are subject to Help to Buy property price caps, so it is worth checking this first. The Help to Buy property price cap is currently £250,000 (or £450,000 in London). You can check the most up-to-date information here: HelpToBuy.gov.uk
What is the difference between Proportunity and Help to Buy?
Both options allow you to get a 5% deposit mortgage. Proportunity is an equity loan similar to the Government Help to Buy scheme. However, the main difference is you can only use Help to Buy on a new build property. Also, Help to Buy is only available to first time buyers. Furthermore, you can only own one property with Help to Buy. Additionally, Help to Buy is subject to regional price caps on the maximum property value.
In contrast, Proportunity does not have any of these restrictions, so you have more options. However, Proportunity is not interest free for 5 years, but is an interest only loan.
Contact Us to help you decide which is right for you.
Can I get Proportunity with a default or CCJ?
Yes. Proportunity is now available to applicants with a less than perfect credit score.
Applicants will need to have a clean credit record for the last six months and a minimum Equifax credit score of 300. Additionally, a maximum of three defaults within the last two years is acceptable. All CCJs should have been fully satisfied for at least three years unless they are from a mobile phone or utilities provider.
Where is Proportunity 5% deposit mortgage available?
Specifically, most new builds and existing homes are suitable for a 5% deposit mortgage. Primarily, properties based in urban areas in England and Wales are eligible. Proportunity is not available in Scotland.
Contact Us and we will instantly assess if the property you like is eligible.
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Will Proportunity lend on all properties?
Because Proportunity is an equity loan not all properties will qualify. For example, properties sold at auction, ‘cash buyers’, and shared ownership properties are not eligible.
Contact Us and we will instantly assess if the property you like is eligible.
Can I use Proportunity with Rightmove or Zoopla?
You can find a property with Zoopla, Rightmove, Purple Bricks or any other online property listing website. We will submit the property to Proportunity who will instantly confirm whether it is acceptable for a 5% deposit mortgage.
Do I need to be a first time buyer to use Proportunity 5% deposit mortgage?
No. The Government Help to Buy is only available to first time buyers who do not own any other property. One great thing about the Proportunity scheme is that you do not need to be a first time buyer to use it. Therefore, if you are moving home, you can consider Proportunity. However, the home you are buying with Proportunity must be your main place of residence. Although, you may have a holiday home or buy to let in the background.
For a free assessment, Contact Us.
Who is eligible for Proportunity?
Primarily, you must have a cash deposit of at least 5% of the property value to use Proportunity. In other words enough deposit for a 5% deposit mortgage.
In addition, it is preferable that your income is at a minimum level. Ideally, your income will be £25,000 for a single application, or £30,000 combined for joint application. However, there is some flexibility here as long as the loan is affordable. We will confirm the affordability for you.
Importantly, the property you are buying must be located in England or Wales.
How much deposit do I need for Proportunity?
The minimum deposit you will need to provide is 5% of the property value. Effectively, this is a 5% deposit mortgage. In addition, Proportunity will lend up to 25% of the property value making your total deposit up to 30%. The minimum Proportunity loan is 10% or £20,000.
How much is the maximum Proportunity loan?
The maximum loan available from Proportunity is currently £150,000. As such, this means a maximum property purchase price of £600,000 with a 5% deposit mortgage.
If you have more than a 5% personal deposit, then there is no maximum property purchase price. The maximum property price is dependent on the maximum loan available from the main mortgage lender and your personal deposit contribution.
Contact Us to discuss your options.
How much is the minimum Proportunity loan?
The minimum loan from Proportunity is £20,000 or 10% of the property value. Basically, this means a minimum property purchase price of £80,000. However, we find Proportunity works best with properties starting at £140,000.
Can I repay Proportunity early?
Any repayment of loan principal amounts during the first 5 years in excess of 10% amount attracts an Early Redemption Charge on the amount repaid applied. This will be 5% in year 1, 4% in year 2, 3% in year 3, 2% in year 4, 1% in year 5. This is called a capital repayment. You will need to get a property valuation in order to make a capital repayment.
What is the maximum property price for Proportunity?
There is no maximum property price for Proportunity. However, the underlying lenders will allow a main mortgage of up to £600,000. Consequently, this means you will need a substantial deposit for purchases above £600,000. Specifically, the Proportunity loan is limited to a maximum of £150,000.
Get a free quote here: Contact Us
Do Proportunity do a credit check?
Initial eligibility for Proportunity does not include a credit check. To clarify, Proportunity run a soft credit check at the latter stages of the application process. Additionally, a hard credit check will be completed before the loan is finalised.
Can I rent my property with Proportunity?
The Proportunity loan is only available for a property purchased as your main residence. Without doubt, changes in circumstances happen which may lead to you having to sell the property, or needing to rent the property. If this happens your case would be considered and consent to change the mortgage type may be given if the circumstances call for it. Although, there is no obligation from Proportunity, nor from the other mortgage provider to approve the request.
Can I use Proportunity to buy a second home?
What is the difference between an equity loan and a normal loan?
A normal loan is for a fixed amount which you repay over a fixed term. In comparison an equity loan is for a fixed percentage of the value of the property. If the property value goes up so does the amount of equity loan. However if the property value goes down the amount of the equity loan also reduce.
Why is the Proportunity interest higher than the mortgage?
A standard formula is used to calculate the APR (annual percentage rate). This enables customers to compare loan products easily and clearly. As a standalone product, the Proportunity APR is higher than many other mortgage products. However when combined with a main mortgage product, the overall loan can have a lower cost to the home buyer. Contact Us to find out more.
How much is the minimum deposit for a Proportunity loan?
The minimum deposit you will need is 5% of the property value, ie. a 5% deposit mortgage.
What is the maximum Proportunity loan?
The maximum loan Proportunity will provide is £150,000.
Is the Proportunity loan capital repayment or interest only?
Proportunity provide an interest only equity loan.
Can I get a buy to let with a Proportunity loan?
No, you cannot. However if you already have a buy to let property or holiday home you can still be considered for a Proportunity loan. This is providing the new property is to be your main residence.
How much is the minimum and maximum loan with the Proportunity 5% deposit mortgage?
The minimum Proportunity loan is the higher of £20,000 or 10%. The maximum Proportunity loan is the lower of £150,000 or 25%.
Get a free quote: Contact Us
How long is the loan term with Proportunity?
The term will match your main mortgage loan. The fixed interest rate will apply for the first 5 years. After this you can choose to take another 5 year fixed rate or move to the standard variable rate.
Is there an early repayment charge with Proportunity 5% deposit mortgage?
Yes, during the first 5 years for payments in excess of 10% of the principal amount. The early repayment charge is 5% in year 1, 4% in year 2, 3% in year 3, 2% in year 4, 1% in year 5.
What happens to my Proportunity loan at the end of 5 years?
At the end of 5 years the loan will revert to a variable rate of interest linked to the Bank of England Base Rate. The applicable rate is allocated by the intermediary platform based on eligibility and assessment of the overall potential of the specific property being financed. Normally after 5 years the property would be remortgaged or sold to repay the equity loan.
If you are not ready to repay the Proportunity loan, you can take another 5 years fixed rate on the same terms.
Contact Us to review your remortgage.
What type of interest rate do I get with Proportunity?
A fixed rate of interest for 5 years followed by a variable rate, or another fixed rate. Your fixed rate will depend on the specifics of your circumstances and the property you buy.
How much are Proportunity fees?
Depending on the interest rate product a fee of £499 may apply, or there could be cashback due to you upon completion. In most circumstances you will not need to pay a separate valuation fee as Proportunity will use the main mortgage lenders property valuation.
Let us tell you about any fees due: Contact Us
Can I get cashback with Proportunity?
From time to time, certain products offer cashback on mortgage completion. Keep an eye on social media for these offers.
How many applicants can be on Proportunity 5% deposit mortgage?
Usually a maximum of 4 applicants can be on the mortgage. However, if the lender agrees to more applicants, Proportunity can also consider this.
What documents will I need to provide to Proportunity?
- Proof of identity such as a passport or driving licence
- Proof of residency, such as a utility bill or bank statement
- Payslips, tax returns or company accounts
Can I buy a property in Scotland with Proportunity?
No, Proportunity is currently only available to properties located in England and Wales.
Contact Us to discuss your options for Scottish properties.
Do I need a property valuation for Proportunity 5% deposit mortgage?
Usually, the valuation conducted as part of the main mortgage application will be sufficient.
What insurance must I take with Proportunity?
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