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How Brits can qualify for new mortgage scheme where you need just £5,000 deposit to buy a house

How Brits can qualify for new mortgage scheme where you need just £5,000 deposit to buy a house

A game-changer of a scheme

A revolutionary mortgage scheme is set to benefit thousands of people who are struggling to leave rented accommodation and get on the housing market.

With inflation peaking at an eye-watering 11% and interest rates still sitting above 5%, it's been a rough few years as the cost of living crisis impacts all of us in different ways.

For those who have been looking to buy their first house or flat, it's left them in a precarious situation where the value of their cash changed almost overnight.

But the new scheme from Yorkshire Building Society means you can get on to the property ladder with just five grand to your household's name.

It means that instead of needing a typical 5% of the property value to secure a mortgage, you just need £5,000 for any property worth up to £5,000.

How does it work?

The easiest way of looking at it is to put it in practical terms.

For a house that's worth £350,000, you'll only need five grand in cash for any deposit.

In contrast, it'd be £17,500 if you were on a 5% scheme or £35,000 if it was up to 10%.

It'll mean your mortgage is bigger, which could mean your monthly repayments.

Under the terms, borrowers with a deposit of at least £5,000 could take out a five-year fixed-rate mortgage at 5.99%. You can take advantage if you are buying in England, Scotland and Wales.

Take advantage.
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How can you claim the £5,000 mortgage scheme?

It's obviously not open to everybody.

For starters, you have to be buying your first property, which should come as no shock give it's a first time buyer scheme.

You also can't be older than 70 when your mortgage agreement would come to an end.

So in other words, if it's a 25 year mortgage agreement. This means the oldest you could be when you take out the scheme is 45.

You could finally buy your first home.
Getty Stock Images

What can the scheme be used to buy?

It's not any property.

You can't use the Yorkshire Building Society scheme to buy a new-build house or flat, for one.

And as with any mortgage, loans are subject to rigorous credit scoring and affordability checks.

And what if you're struggling but really want to get on the ladder?

Yorkshire Building Society isn't the only bank or building society out there that is doing its bit to help those who want to buy.

Skipton Building Society has what it calls a 'track record' mortgage. This is a scheme that helps renters to make the jump on to the ladder, potentially with no deposit needed at all (of course, subject to terms and conditions).

Skipton uses borrowers’ records of rental payments to help work out what they may be able to borrow.

Some lenders also offer deals where family members put up savings as security for a certain time period – such as Barclays’ family springboard mortgage.

Featured Image Credit: Getty Stock Images

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