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 rate.

You’ll enjoy:

  • A fixed interest rate of 2.70% AER / 2.67% Gross for 3.5 years (42 months) is payable on the required minimum balance of £2,000 and above, followed by a variable rate which tracks at 0.50% below the Bank of England bank rate: view Lend a Hand Savings Account interest rate
  • Interest paid monthly

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

  • One savings account can be opened for each 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 borrower defaults on their mortgage payments – there is a risk that you won't get your money back. Please read the section ‘About the legal charge (or guarantee in Scotland)’ below for important information about the legal charge (or guarantee) and what it could mean for your savings.
  • You cannot 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 borrower.

So, if the borrower 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 borrower 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 Bank 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 Bank savings or current account.

  • 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 borrower 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 borrower 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.

Summary box

Account name
Lend a hand Savings Account
Interest rates (AERs) Interest rate fixed for 42 months followed by a variable rate which tracks 0.50% below the bank rate. Interest paid monthly and must be paid into an eligible Lloyds Bank savings or current account.
Tax status  
Interest is paid net after the deduction of income tax at the rate specified by law - currently 20%.If you are a UK resident non tax payer you can register your account(s) to receive credit interest paid gross in branch or by completing an HMRC R85 form. If you are completing the R85 form you will need to complete one form for each account you hold. You can download the R85 form at www.hmrc.gov.uk.
Conditions for bonus payment
Not applicable.
Withdrawal arrangements  
No access to funds until the account is closed.
Access You won’t be able to withdraw money until your account has been closed and your savings transferred to the account into which your interest has been paid.

The Lend a Hand Savings Account cannot be closed until the legal charge (or guarantee in Scotland) has been released and the initial 42-month fixed-rate savings period has ended. This applies even in the case of an emergency.

The legal charge (or guarantee) will only be released on full repayment of the loan by the borrower or after the end of the initial 3-year fixed-rate period of the mortgage provided that the value of the loan expressed as a percentage of the property has fallen below 90%.

 

Glossary

AER

AER stands for Annual Equivalent Rate. It illustrates what your interest rate would be if interest was paid and compounded each year and allows you to easily compare different savings accounts.

Net rate

Net rate is the rate of interest payable after allowing for the deduction of income tax at the rate specified by law (currently 20%).

Gross rate

Gross rate is the contractual rate of interest payable before the deduction of income tax at the rate specified by law (currently 20%).

Tax free rate

Tax-free is the contractual rate of interest payable where interest is exempt from income tax.

Ways to apply

In branch

Visit your local branch and we’ll open the account for you.

Local lend a hand mortgages

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Find out moreFind out more about lend a hand mortgage

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      YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE