Proportunity offers equity loans that allow you to add to your mortgage deposit.
What's in this review?
An equity loan from Proportunity could give you the funds to apply for a mortgage with a lower loan-to-value ratio, and therefore a lower interest rate.
You can apply to borrow between 10% and 25% of your desired property’s value from Proportunity, and pay a fixed rate on this interest-only loan for the first 5 years. The capital owed at the end of the loan will be equal to the same percentage of your property’s value that you applied to borrow.
The most you can borrow from Proportunity is £90,000. You must also make a contribution to the mortgage deposit worth 5% of the property’s value yourself.
Proportunity allows you to access a mortgage lender’s best rates quicker. What’s more, due to the superior mortgage rates unlocked through a Proportunity equity loan, home ownership typically works out far cheaper.
How does Proportunity work?
You can apply for a Proportunity loan on new-build or previously occupied properties. To be eligible, you must be aged between 21 and 68 with annual earnings of at least £30,000 (or £45,000 for joint applicants). You don’t need to be a first-time buyer, but the property must be your main residence.
The first step to applying for a Proportunity loan is to register with its website and upload details of your desired property. This will allow the lender to deem whether the property is eligible for you to borrow money against.
You have to apply for a Proportunity loan through a mortgage broker. The lender will recommend a range of partnered brokers after you register with its website, but you also have the opportunity to onboard your own choice of broker.
The mortgage broker will recommend and apply for a mortgage in principle on your behalf, then for your Proportunity loan afterwards.
The fixed rate offered on your Proportunity loan will differ depending on your financial situation and your choice of property.
How do Proportunity equity loans compare to Help To Buy equity loans?
You can apply for an equity loan from the government via its Help To Buy scheme, although the range of eligible properties is more limited with this scheme.
Help To Buy equity loans are only available on specific new-build properties within a specific price range. What’s more, it’s widely agreed that the eligible new-build homes tend to be overpriced by developers.
Of course, if your chosen property is eligible for a Help To Buy equity loan, you’re free to compare the overall cost of both options. Help To Buy loans are interest-free for the first five years, whereas you’ll begin paying interest on Proportunity loans immediately.
You can’t apply for a Help To Buy loan and a Proportunity loan.
Are Proportunity loans safe?
Proportunity is authorised and regulated by the Financial Conduct Authority (FCA), which means it is subjected to the same regulations as all financial companies in the UK.
Pros and cons of Proportunity equity loans
- Borrow up to 25% of your property’s value (capped at £90,000).
- Available on new-build and previously occupied homes.
- Interest rate is fixed for five years.
- Proportunity loans allow you to access superior mortgage rates, meaning you’ll often pay less overall for home ownership.
- You can only apply via a mortgage broker.
- There is no interest-free period on the loan.
- Proportunity only lends on properties it believes will appreciate in value.
The bottom line
Proportunity provides an alternative to Help To Buy equity loans that more people will be eligible for. What’s more, it will frequently prove to be a better deal than a traditional 95% mortgage.
Frequently asked questions about Proportunity
Find a mortgage using a broker to compare the market
Read more on this topic
A guide to mortgage holidays during the coronavirus outbreak Making monthly mortgage repayments is unsurprisingly a top concern for many UK homeowners right now. Find out what your options are.
Finder Mortgages Customer Satisfaction Awards 2020 How did your mortgage provider fare in our latest customer survey? Find out the winner of this year's Finder Customer Satisfaction Awards.
Property flipping Our comprehensive guide to property flipping gives you all the information you need to make a profit, from finding the right property to the costs you need to consider.
Methodology for mortgage ratings You’ll find customer satisfaction star ratings on some of our mortgage provider reviews. Here’s how we came up with them.
First-time buyer statistics We looked at the latest statistics to see how difficult it is to get your foot on the property ladder in 2019.
Mortgage statistics From the average house price to how many outstanding mortgages there are, we explore all the latest mortgage statistics for the UK.
Buying repossessed property How to buy a repossessed property and what the risks and benefits are. Plus, where to look for properties, buying at auction and issues to look out for.
DIY conveyancing Detailed guide to DIY conveyancing, including what checks you need to make, the searches you need to carry out and when you’re better off employing a professional.
What is a deed of trust and why do you need one? We explain what a deed of trust is used for and how it ensures that all joint owners of a property get their fair share of the proceeds if it’s sold.
UK cities mortgage leaderboard For a Londoner, it takes 24 years and 11 months to save for a deposit, while in Sunderland it takes 6 years and 8 months – a difference of 18 years.