Leeds Building Society offers new 2 per cent deposit mortgage for first-time buyers
Leeds Building Society has launched a new mortgage product aimed at helping first-time buyers get on the property ladder with a deposit of as little as 2 per cent.
“Start Mortgage” allows eligible borrowers to access loans up to five times their annual income. However, a minimum deposit of £5,000 is required; This means the 2 per cent deposit option is available for properties valued at £250,000 or more.
The maximum loan that can be received under the program is £500,000, and applicants must have a minimum income of £30,000.
Mortgages subject to standard affordability assessments are available directly through Leeds Building Society or through mortgage brokers.
In particular, the society has confirmed that self-employed individuals can apply and gift deposits are accepted, potentially allowing family members to contribute as well.
The five-year product has a fixed rate of 5.65 per cent with free standard valuation and no fees upon completion.
Some other lenders offer low or no deposit mortgages to help first-time buyers.
Matt Bartle, mortgage director at Leeds Building Society, said: “Saving for a deposit remains one of the biggest hurdles for first-time buyers.
“By lowering this barrier to just 2 percent and combining this with flexible loan criteria, we are helping more people get closer to owning their own home.”
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Moneyfacts finance expert Rachel Springall said: “The Start Mortgage is a rare 98 per cent loan-to-value deal and as applicants can borrow up to five times their income, this launch could make a meaningful difference to homeowners who would otherwise be stuck in the renting cycle.”
Fixed mortgage rates fell at the fastest rate since October 2024 as lenders cut prices that rose at the start of the Iran war.
As the industry grapples with rapidly changing outlooks for inflation and borrowing costs, the number of mortgage deal options has continued to grow, with the average number of days on market remaining at 14.
While the average two-year residential fixed interest rate was 4.84 percent at the end of February, it rose to 5.9 percent at the beginning of April due to high uncertainty around the Strait of Hormuz.
The downturn had begun later that month, with Moneyfacts data showing fixed rates fell for a second consecutive month in June, marking the biggest monthly falls since October 2024.
Average two-year adjustments fell 0.16 percent, while five-year adjustments fell 0.11 percent, both for an average of 5.52 percent.
