Some of the major lenders in the UK have begun selling mortgages which only require a small deposit again.
Santander and Nationwide have recently launched mortgage products which are at 95 per cent loan-to-value. This means borrowers only need a deposit of 5 per cent, lower than the usual deposit required to purchase a house. This percentage will mean borrowers need a deposit of approximately £13,850 for a typical house.
For those borrowing from Nationwide, they will be required to pay 3.99 per cent interest, and a fee of £999, in order to secure themselves a two-year fixed-rate deal. The 5 per cent deposit mortgage was last offered by them back in 2008.
“It is great to see more lenders offering straightforward 5 per cent deposit mortgages and specifically targeting first-time buyers. We have been waiting a long time for the biggest banks to return to this market,” said Aaron Strutt, a mortgage broker with Trinity Financial.
Previously most mortgages that operate like this were only done through the support of the government’s Help to Buy scheme, but now lenders are returning to it as they attempt to go it alone.
