To make sure you never miss out on your favourite NEW stories, we're happy to send you some reminders

Click 'OK' then 'Allow' to enable notifications

First-time buyers only need £5,000 deposit to buy house with new mortgage

First-time buyers only need £5,000 deposit to buy house with new mortgage

It could make all the difference

An ultra-low mortgage is entering the UK market in what is a game-changer for those struggling to get on to the property ladder.

The decision to buy your first home is a big one. But in a cost of living crisis, coming off of the back of two years of sky-high inflation and rising prices across the board, from fuel to food, it's been harder than ever to save.

Now, a brand new mortgage deal is being offered that can guarantee those who want to say goodbye to renting the chance to buy their first flat or house with a 99% mortgage.

You'll only need to put up £5,000. A big change from a market where five per cent mortgages are the norm.

To put this in simple terms, you would only need £5,000 for a house valued up to £500,000. In a 5% scheme, you would need five times that at £25,000.

Who is behind the scheme?

Yorkshire Building Society is the building society bringing the deal to the open market for those who have never owned a home.

It'll be available across England, Scotland and Wales, with the new mortgage available via brokers through Accord Mortgages; the lender’s intermediary-only arm.

For someone buying a their first property for £200,000, a £5,000 deposit would equate to 2.5% of the purchase price.

The remaining 97.5% would then be on a mortgage.

You could finally buy your first home.
Getty Stock Images

Why is it being introduced?

Yorkshire Building Society's director of mortgages, Ben Merritt, said that their research hinted that £5,000 is the amount that could shorten the time needed for first-time buyers to get mortgage-ready.

He said it could help to encourage a 'level playing field for those who don’t have financial support from their families to fall back on'.

Under the deal, which is available to first-time buyers only, borrowers with a deposit of at least £5,000 could take out a five-year fixed-rate mortgage at 5.99%.

Take advantage.
Getty Stock Images

Who can take advantage and what are the terms?

Anyone who has never owned a house before. There is a cap on your age at the end of the mortgage term, with it capped at 70.

The mortgage is not available for new-build properties or flats, and the society said loans are subject to rigorous credit scoring and affordability checks.

Mr Merritt said: “While £5,000 represents a 1% deposit for those who need to borrow the maximum amount available, the key is that customers are still putting money into a deposit, they still have to demonstrate strong creditworthiness and pass an affordability assessment to be eligible for a £5,000 deposit mortgage.

“We have a duty to encourage financial responsibility in anyone taking out a mortgage.”

Featured Image Credit: Getty Stock Images

Topics: Home, UK News, Money, News, Good News, Cost of Living