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Some Banks Are Bringing Back 10 Percent Deposit Mortgages

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Some Banks Are Bringing Back 10 Percent Deposit Mortgages

Some UK banks are bringing back 10 percent deposit mortgages for first time buyers, but strict lending criteria means that fewer people will be eligible.

Lloyds Banking Group says these mortgages won't be valid alongside other schemes, including the popular Help to Buy scheme.

The new scheme will be available from 8 December from Lloyds and its Halifax brand, with the maximum loan amount capped at £500,000.

The maximum loan-to-income ratio will be capped at a multiple of 4.49.

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Credit: PA
Credit: PA

Jasjyot Singh of Lloyds Banking Group said: "We are committed to helping people take their first step onto the property ladder and while there have been record levels of mortgage approvals over the past few months, raising a deposit is still hands down the biggest challenge for first-time buyers.

"Reintroducing options at higher LTVs (loans-to-value) means we can support more people ready to get a foot on the ladder.

"We will monitor service levels to make sure we continue to be there for our customers.

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"We also relaunched our Lloyds Bank Lend a Hand mortgage last month, which enables first-time buyers to borrow up to 100% of the mortgage with the support of their family."

Credit: PA
Credit: PA

Nationwide Building Society also recently said it would be offering 10 percent deposit loans for house purchase, and for existing mortgage members wanting to move house.

Yorkshire Building Society has also started offering 10 percent deposit mortgages.

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Recognising the difficulty first time buyers are facing when it comes to purchasing their own home, the government recently announced that it plans to offer mortgages of up to 95 percent.

Addressing the Conservative Party conference, the Prime Minister said that it was a 'disgraceful truth' that 'millions of people are forced to pay through the nose for a home they can't truly love'. He said that he wants to turn 'generation rent into generation buy'.

In his speech, Johnson acknowledged that home ownership among young people had plummeted, and promised to change the planning system to allow for what he claims is the biggest expansion of home ownership since the 1980s.

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In an interview with The Telegraph ahead of his speech at the Tories' virtual conference, Johnson said that a 'huge' number of people were excluded from owning a home, and that he wanted to solve that problem with mortgage schemes that permit deposits of as little as five percent.

Johnson - whose party has been in charge of the country for a decade now - said: "I think a huge, huge number of people feel totally excluded from capitalism, from the idea of home ownership, which is so vital for our society.

"And we're going to fix that - 'Generation Buy' is what we're going for."

Featured Image Credit: PA

Topics: UK News, Money

Amelia Ward
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