New 99% Mortgage for First-Time Buyers

Posted in March 2024

A new 1% mortgage aimed at the First-Time Buyer market, has just been launched by Yorkshire Building Society. 

New 99% Mortgage for First-Time Buyers

Although there had been numerous rumours that the Government was planning to announce a state-backed 1% mortgage deposit scheme, this did not materialise in Jeremy Hunt’s Spring Budget 2024.  However, Yorkshire Building Society has now stepped in with its own deal that is exclusively available for First-Time Buyers.

This new free fee deal that was launched yesterday, will be made available directly to customers and via brokers through Accord Mortgages, a dedicated Intermediary-only subsidiary of Yorkshire Building Society, one of the largest mutual building societies in the UK.  It will allow First-Time Buyers the opportunity to borrow up to 99% of a property’s value at a borrowing rate of 5.99%, to the maximum price of £500,000, with a deposit of just £5,000. If applying for a joint mortgage, one applicant must qualify as a First-Time buyer, neither can currently own a property and both must be aged 70 or under, at the end of the planned mortgage term.

The mortgage deal will not be available for new-build properties or flats.

Although low-deposit mortgages do not suit everyone, some in the property industry still believe they can offer the chance for First-Time Buyers to get their foot on the property ladder and therefore have a rightful place in the market.

Matt Smith from Rightmove said: “It’s encouraging to see lenders continuing to try to innovate in the mortgage market, even after the government abandoned its own plans to encourage lower deposit mortgages in the Spring Budget. This new product has the potential to help some first-time buyers who fit the affordability criteria, but are struggling to raise a bigger deposit.

“The game-changer for first-time buyers will be an innovation, or regulatory changes, that helps with the challenge of raising a deposit, and being able to borrow enough from a lender, and there should be support for lenders who are trying to break the mould to help more would-be first-time buyers onto the ladder.”

John Charcol, the Mortgage Technical Manager at John Charcol, commented: “Those that would benefit from such a deal are likely to be high earners and prospective buyers with a good credit score that just simply haven’t been able to save a deposit amid high rents”.

He added: “That said, while it’s encouraging to see lenders launch new products and expand their existing criteria sometimes these don’t always have the same impact especially when we consider comparable options in the market which help borrowers overcome affordability and/or deposit barriers.”

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