Building your Tembo Plan
Frequently Asked Questions
By increasing the size of your deposit, we are able to unlock much lower interest rates on your mortgage. This is because you’re borrowing less of the property’s total value, so the lender is taking on less risk. In mortgage-land this ratio is called Loan to Value (LTV). While 95% and 90% LTV mortgages are available, the interest rates on these products can be eye-watering. A percent here or there might not seem like much, but on average we save our users £14,000 over the initial mortgage term. That’s a saving of over £230 a month!
Lenders will typically let you borrow up to 4.5x your combined income. So if you’re earning £25,000, you could borrow up to £112,500. We’ll also take into consideration any commission or other earnings, so be sure to include those in your plan. If you have a homebooster on board, then we’ll increase your affordability with a deposit boost - simple.
Yes. Providing you’re eligible for a Tembo deposit boost, then we will create a deposit for you with the help of your homebooster. The ‘boost’ is a loan against your homebooster’s property, and the money we unlock with the boost will then become your house deposit. Our smart technology will calculate the best amount to unlock to help you buy your dream property in the most affordable way.
The majority of our customers are first-time buyers, but don’t worry if this isn’t your first rodeo - we’re not an exclusive bunch! We regularly work with second-time buyers or movers who are ready to buy a new property but might be struggling to afford their dream home.
If you have an active Debt Management Plan (DMP), Individual Voluntary Arrangement (IVA) or County Court Judgement (CCJ), then we recommend that you speak to a specialist adverse credit broker. However if you have a low credit score but none of the above, then we might be able to help. By decreasing the amount you are borrowing with a deposit boost, you’ll be reducing your ‘risk’ to the lender, so don’t let a low score deter you - create a plan and say hello.
Depending on whether you’ve found a property yet, the complexity of the case, and how quickly you and your homebooster (if you have one) get your documents back to us, it could take anywhere from 2 days to a few months.
If there’s no homebooster in the picture, but you’re eligible for a mortgage, then we can absolutely help you. Complete a plan online and leave the ‘boost’ section empty to see whether you’re eligible.
Our fees vary from £249 to £749 depending on the type of mortgage we arrange for you. The fee isn’t payable until your mortgage application is submitted to the lender, and your dedicated broker will explain your fee early on in the process so there won’t be any surprises.
Absolutely. Your homebooster can join the journey as soon as you’d like them to, and will definitely be involved after your first call with our broking team. Once we get closer to application, our team will usually speak with the homebooster separately, as our affordability checks will cover their personal finances in more detail.
Many of our buyers will pay the interest charge for their homebooster on a monthly basis - in fact the combined mortgage charges for the homebuyer and homebooster mortgage are often less than their previous rent. However, it’s important to note that the legal obligation for paying the interest sits with the homebooster.
We work with over 90 lenders including all of the UK’s major mortgage providers and will scan over 20,000 different products to get you the best deal available on your homebuyer mortgage.
As with any loan, the risk is that if repayments aren’t made, your home may be repossessed. Our mortgage advisors will work with you to ensure that the boost is affordable based on any income you may have as well as your pension.
No. The boost and the homebuyer’s mortgage are two separate products, meaning if the buyer misses a payment or has any other difficulty with their mortgage there will be no impact on your credit score and you wouldn't be liable to pay.
There are three key differences. The first is that the interest is payable monthly on a deposit boost, so the amount you've borrowed won't change. Equity release loans have no monthly payments, meaning that the interest will mount up over the lifetime of the loan, and you could end up owing considerably more than you originally borrowed. In addition to this, equity release interest charges are much higher than on our deposit boost. Over a ten year period, Tembo's interest costs will be around 1/3 of some equity release products. Secondly, most equity release products have a lifetime term, so there can be substantial exit penalties should you wish to repay the loan. With the Tembo deposit boost there is much more flexibility - you can set the term of the loan to suit your family's needs. Finally, as equity release isn't classed as a mortgage product, there are no affordability checks. As the deposit boost is a 'retirement interest only' mortgage, our experts will carefully evaluate income, pensions and expenditure to make sure the loan is affordable and ethical for each of our customers.
The interest on the loan is payable monthly. When it comes to the capital, the terms can be flexed to suit your needs. Most often it isn’t repayable until you move home, if you go into care or die.
As a general rule of thumb, you’ll need to have paid off 50% of your mortgage before you’ll be eligible for a deposit boost. However, there are other options available if you haven’t yet reached that milestone but you’d still like to support your loved one.
The product we use most regularly for a deposit boost specifies that the homebooster must be older than 55, with an upper age limit of 90. However, there are other suitable options which our broking team will discuss with you should you fall outside of this bracket.
In order to benefit from the lower interest rates on the first-time buyer mortgage, the money must be formally gifted by the homebooster to the homebuyer at the time of the mortgage application. However, there is nothing to stop this gift being returned at a later date - it all depends on the wishes and financial position of those involved.
If the homebooster does not want to gift the money, then it can be loaned to the homebuyer. However, this will mean the rates the first-time buyer pays on their loan will be higher as the lenders will consider it to be a great risk.
Tembo is not currently authorised to give tax advice. In passing on some of your wealth earlier in your life, a deposit boost could have inheritance tax benefits for families. This is because transfers made 7 years or more before your death could be classified as potentially exempt transfers, which would reduce the total inheritance tax due. Note that there is normally no inheritance tax to pay if the value of your assets is below £325,000 per individual, or if you leave everything to your spouse or civil partner. If you give your home away to your children in your will, then the limit increases to £500,000 per individual. So, for a couple there is the potential for £1m inheritance tax free threshold. If your assets are above this level then inheritance tax at a rate of 40% could be due.
In short, yes. There are a number of other products available, including joint borrower sole proprietor (JBSP) mortgages, guarantor mortgages and ways of supporting your loved one which allow you to pay off capital and interest monthly. We are always focused on the best outcome for our customers, so our mortgage experts will consider all options to find the perfect product for you.