Yorkshire Building Society launches mortgage with £5,000 deposit

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Yorkshire Building Society has launched a fee-free mortgage with a down payment of just £5,000.

This product can be used to buy property worth up to £500,000. This means you can use it with no government scheme and a 99% loan-to-value ratio.

The five-year, fixed-rate mortgage at 5.99% is available through the lender’s brokerage arm, Accord Mortgage.

Not available for new construction or apartments.

Ben Merritt, director of mortgages at Yorkshire Building Society, said: ‘For those who need to borrow the maximum amount available, £5,000 is the equivalent of a 1% down payment, but importantly customers can still put down a down payment. However, you still need to make a down payment.” Once you demonstrate strong credit and pass an affordability assessment, you can qualify for a £5,000 deposit mortgage.

“We have a duty to encourage financial responsibility among our mortgage lenders.”

Mark Harris, CEO of mortgage broker SPF Private Clients, is generally positive about the new product.

“Product innovation is very welcome, especially when soaring rents are making it more difficult than ever for first-time buyers to come up with a deposit,” he said.

“But there’s always a balance required, and especially for loans with LTVs above 95%, borrowers must pass rigorous affordability evaluations and credit scoring. Also, apartments tend to fare less well during real estate downturns. and new build properties are excluded, and the property value is capped at £500,000.First-time buyers will also need to take out a five-year fixed rate product.

“Ideally, borrowers wouldn’t have to borrow so much money. But not everyone has access to mom and dad’s bank. If you’re not in this position, you can’t realistically afford to get on the housing ladder.” Is it fair that I have to rent it out indefinitely?

“The higher the borrowing level, the greater the threat of negative equity, but since the only product available is a five-year term, you would expect the property to appreciate in value over that period. There is no interest-only option, so , the borrower will repay a small amount of capital and interest every month, increasing his equity.

“Critics may wonder what happens if a buyer loses their job and can’t afford to pay their mortgage, but the same is true for renters. Everyone can move back in with mom and dad. It does not mean.”