After this, they revert to a repayment deal, so that the capital is repaid at the end of the mortgage term.By paying just the interest on their loan, borrowers can use the cash they save to pay solicitor’s fees, stamp duty and removal costs, and furnish their new home. With so much pressure on us to fund our own retirement, parents may be reluctant to give away money they might need in the future.HSBC is taking a different approach, enabling first-time borrowers to repay only the interest on their mortgage for the first three years. This enables child and parent, or another family member, to take out a joint home loan; because both incomes are taken into account, a greater sum can be borrowed than if the child were purchasing alone.The main advantage of 1st Start is that parents can help their children without handing over wads of cash they might never see again. Lenders are coming round to the idea that they need to do more to help first-time buyers. Bristol & West (B&W) and HSBC launched mortgages targeted at this group last week.B&W’s 1st Start mortgage was originally developed by Bank of Ireland, its sister company. High property prices combined with five interest-rate rises in the past year are making it harder than ever to buy a place of your own.
But all is not lost. First-time buyers are becoming an endangered species, accounting for just over a quarter of all mortgages taken out in August, says the Council of Mortgage Lenders.

Policyholders could sell other fixed-interest assets in the portfolio so they do not suffer the exit penalties of the with-profits fund.”. “If you have little exposure to fixed interest, then the closed fund can act as the bond portion. Kerry Nelson, at financial services group The Money Portal, points out that you may be able to get your hands on some cash before then, as some funds allow you to redeem 7.5 per cent of your assets free of an MVR.Bob Perkins, technical manager of IFA Origen, part of the Aegon financial services group, says that ultimately you must decide whether the closed fund still meets your investment objective and risk profile.”Examine the fund in the light of what else you have in your portfolio,” he advises. He also warns that people exiting will make things worse for those left behind.”The problem for policyholders remaining in with-profits funds is that those leaving in the next couple of years through MVR-free dates [policy anniversaries on which exit penalties are waived] will be taking more than their fair share of the fund,” he says.”Those exiting will take the face value, which will lead to funds becoming considerably weaker because of the shortfall between the fair and face value.”If you have only a couple of years until the end of the policy or an MVR-free date, it may be sensible to stay put. Also to be taken into account is the market value reduction (MVR) – the penalty you pay for exiting the fund.Adrian Shandley, managing director of IFA Premier Wealth Management, warns that if no bonus rate is being paid, the charges will eat into the value of your fund.

“But if policyholders have been in the fund for a relatively short time and a large proportion of assets are in fixed interest [it's not such an attractive prospect].”But Mr Lomas cautions that it is impossible to generalise about whether people should stay in closed funds: “Circumstances for each client differ and the decision needs to be taken on a case-by-case basis.”He believes policyholders should consider the current asset allocation of the fund, the bonus rates, long-term performance, and the surrender value and how this compares with the rest of the market. Bob Hair, director of personal financial planning at the Edinburgh private client firm Turcan Connell, points out that Scottish Equitable has closed its fund but remains a strong company.As well as looking at an insurer’s financial strength when deciding whether to remain in a closed fund, you should consider what type of fund it is, advises Simon Lomas, director of IFA Greystone Financial Services.”Some have a few policyholders who have been there for a long time, and the fund might be well managed and have sizeable profits If this is the case, you should probably remain,” he says. Insurers rated AA+ by ratings agency Standard & Poor’s have an average equity weighting of 50 per cent. This falls to 43 per cent for companies rated AA, 34 per cent for A+, and 20 per cent for A or below.With-profits funds can close for many reasons, not necessarily because the insurer is financially weak. The allocation to equities is decided on the basis of the financial strength of the insurancer company. And so open funds should, on the whole, do better than closed ones.”Mr Connolly says that open funds have an average holding of 48 per cent in equities, compared with 32 per cent for closed funds. “But over the long term, it is likely that equities will outperform fixed interest.

They recommend that clients review their invest- ment and decide whether it is the best home for their money.Patrick Connolly, investment manager at independent financial adviser (IFA) John Scott and Partners, warns that closed funds usually hold a relatively high weighting in fixed-interest investments.”There will be times when fixed interest outperforms equities,” he says. In March, 33 per cent of open funds were in the top quartile for performance, along with 12 per cent of funds closed up to a year ago, 5 per cent closed between one and five years ago, and 7 per cent of funds closed for more than five years.But financial advisers are not so convinced about closed with-profits funds. It argues that a number of closed funds have outperformed their open counterparts and “probably outperformed the results they would have achieved had they remained open”.This statement is based on research by the FSA. But the FSA says it is a common myth that policyholders in closed funds should always cash in their policies because of the risk of under-performance. It announced last week that concerns about closed with-profits funds – those no longer open to new investors – have been overstated.Out of 110 with-profits funds, 66, with a total of £191bn in assets, are closed to new business. “With-profits” has almost become a term of abuse, following tales of funds closing, bonuses getting slashed and stinging penalties being imposed on those who have had enough and want to cash in their investment. So roll on the tiger economies.NOSE FOR VALUEPrices: from £200 to £200,000+ each.More information: the International Chinese Snuff Bottle Society, ; Robert Hall (dealer), ; Robert Kleiner & Co (dealer), 020 7629 1814.Auctions: 10 November – Fine Chinese Ceramics and Works of Art, Sotheby’s, London;April 2005 – items from J&J Collection of Chinese snuff bottles, Christie’s, London..