Thisismoney.co.uk - Santander launches 2% deposit mortgage to help first-time buyers: Is it a game changer?

First-time buyers can now secure a mortgage with Santander with just a 2 per cent deposit, as long as it is not below £10,000.

It means an eligible buyer could purchase a £500,000 home with just a £10,000 deposit. 

Santander's ‘My First Mortgage’ product is a five-year fixed rate deal, with a rate of 5.19 per cent, zero product fee and £250 cashback.

It is great to see one of the bigger banks coming out with a low deposit scheme targeting first time buyers with smaller deposits,' Aaron Strutt of broker Trinity Financial told Thisismoney.co.uk.

'There is a reasonable amount of choice in this part of the mortgage market now which means you do not need a huge deposit to buy a property anymore. The rate is not amazing, but it is not bad. For many the mortgage repayments would probably be cheaper than renting especially if they take a longer term so I suspect this will be a popular product.

'Many of the Big banks and building societies are offering income stretch mortgages or guarantor mortgages but they have shied away from deals where borrowers need less than a 5 per cent deposit. 

'Santander’s new ‘my first mortgage’ product will mean it is offering similar schemes to the ones through Skipton, Yorkshire Building Society and April.'

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The information contained within was correct at the time of publication but is subject to change.

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