MARSDEN Building Society is to launch mortgages linked to family savings in a bid to help people on to the housing ladder.

The Pendle-based mutual has set aside £20million to begin offering family offset mortgages from next month.

The loans would allow parents to use their savings at Marsden to ‘offset’ mortgages taken out by their children.

So if a member had £25,000 in savings at the building society, a relative taking out a linked £100,000 mortgage would only pay interest on £75,000, with the interest lost on the £25,000 savings.

The family offset scheme, which is seen as an innovative approach to helping young people on to the housing ladder, was revealed by new Marsden chief executive Rob Pheasey as the building society unveiled its results.

Mr Pheasey said: “The advantage is the parent or other family member doesn’t need to give the funds away altogether, they can pledge the funds.

“It is put into an offset account and that reduces the interest that needs to be paid on the mortgage.”

However, former operations director Mr Pheasey said there were no plans to offer 85 per cent or higher mortgages, despite a return to bumper home loans from some lenders.

The results from Marsden, which has 38,000 customers, mostly in the North West, revealed that mortgage lending dropped from £60million in 2009 to £39.5million last year.

Mr Pheasey attributed the decline to a reluctance to ‘match’ the rates offered by larger lenders.

Net cash inflow almost halved, from £29.8million to £15.6million, because of an ‘exceptional’ 2009 when reserves were brought back from banks, said Mr Pheasey.

Pre-tax profits dipped from £810,000 to £604,000 last year.

The mutual, which is based in Nelson and has six branches in East Lancashire, made 20 redundancies in 2010, reducing headcount to 70.