Loan deal for graduates

A new mortgage which allows up to four friends to club together to buy a home was launched this week by Britannia building society.

However, there is a rather large string attached - the loan is only available to graduates, in a deal that Britannia has negotiated with an organisation called the Graduate Network. The mortgage will offer graduates three times their salaries to a maximum of 90% of the property's value.

Britannia says four graduates each earning £24,000 a year could afford a property costing £320,000 - assuming they can find the 10% de posit between them. It suggests the monthly mortgage repayments would be roughly the same as they would pay in rent.

Britannia has drawn up a legally-binding agreement that sets out exactly what happens if one person decides to move on. In the first instance, it is offered to the other partners - after that it is either rented out or sold on to another graduate.

The mortgage offered is a tracker (currently at 5.35%), and there are no fees. Applicants are strongly advised to have life insurance and critical illness cover, but it is not mandatory. They do have to open a joint bank account. Apply online only at britannia.co.uk