Some banks are starting to offer 10% first-time buyer mortgages again 

The uncertainty of the pandemic through the housing market in a spin making it almost impossible for first-time buyers to get on the property ladder.

In the wake of the pandemic, lenders increased the required deposit over concerns that house prices could fall in the wake of the pandemic. There was also the threat of unemployment and economic crisis.

Now, some banks are bringing back their first-time buyer mortgages plus there’s a whole host of new deals and cash incentives – a sign of increased confidence in the market!

TSB along with the digital bank Atom and Yorkshire Building Society is launching a range of loans with as little as 10% deposits again. 

Lloyds, the UK’s biggest mortgage lender is reintroducing its 10% deposit mortgage deal, an option it pulled at the start of the pandemic. The loan must not exceed £500,000 and is only available to first-time buyers and new-builds are excluded. 

Jasjyot Singh, the managing director of consumer and business banking at Lloyds Banking Group, said: “We are committed to helping people take their first step on to 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. Higher LTVs (loans to value) means we can support more people ready to get a foot on the ladder.”

Nationwide Building Society is making 10% deposit loans available for existing mortgage customers looking to move as well as first-time buyers from the second week of December.

Yorkshire Building Society has relaunched its 10% deposit mortgages, aiming at first-time buyers and existing homeowners who want to remortgage or move.

Owned by the Co-op Bank, Nationwide and Platform plan to scrap restrictions on gifted deposits meanwhile Virgin Money have cut their rates. 

Despite new incentives, rates have increased dramatically. The average two-year fixed-rate (for a 90% mortgage) jumped from 2.05% in January to 3.55% in October, the Bank of England reports. 

TSB and Platform are offering five-year deals at 3.79%. however, TSB has a £995 fee and offers £500 cashback, whereas there is no fee for Platforms’ deal and there is a £1,000 cash back incentive.  

The government has also announced a new Help to Buy scheme, the Help to Buy: Equity Loan scheme which will cover 2021-2023 for first-time buyers interested in new-build homes. 

The house must be newly built and worth up to £600,000, you must have not owned any property previously and cannot sublet or rent it out.

The Equity Loan sees potential buyers receive up to 20% of the value of the new-build home from the government (40% in London), the homeowner is then required to pay at least a 5% deposit and arrange a mortgage of 25% or higher.