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Accord Mortgages, Bank of Ireland and Skipton for Intermediaries are the first large lenders to step back into the low deposit market and offer five per cent deposit mortgages. 

Accord is offering a five-year fix at 3.99%, Bank of Ireland has a five-year fix at 4.05%, and Skipton has a long-term fix at 4.17%. First-time buyers will be able to borrow around 4.49 times single or joint salaries and borrow up to £500,000. The lenders can accept gifted deposits and may use bonus income for affordability purposes. Please check the table below for the reversion rates and APRCs.    

Aaron Strutt, product director at Trinity Financial, says: "Many first-time buyers expect the five per cent mortgages to be more widely available, but for the moment only a few lenders are offering them. TSB has announced it will launch new low deposit deals for first-time buyers and movers on 7 April.

"Some of the biggest banks and building societies are expected to provide five per cent deposit mortgages over the coming weeks as they use the chancellor's mortgage guarantee scheme. None of the lenders in this market at the moment have used the government's guarantee because they have been waiting to offer these deals for a while. They needed more competition in the sector before launching new products."

Should you take a five per cent deposit mortgage?

If you are planning to purchase your first property and want a five per cent deposit mortgage, you should consider whether these products are suitable and if you should save up for a bit longer. If you can raise a ten per cent deposit, you will get access to a much wider range of shorter-term and cheaper rates.

With a ten per cent deposit mortgage, the rates are likely to be priced around three per cent. Taking a five-year fix priced around four per cent is a big financial commitment and these products have early repayment charges.

Summary of the new rates and the general acceptance criteria: 

Accord Mortgages Bank of Ireland for Intermediaries Skipton Building Society  for Intermediaires
  • 5% deposit mortgage
  • 3.99% five-year fix exclusively for first-time buyers (at least one applicant must be a ftb).
  • Reversion rate 4.49% and 4.10% APRC
  • £995 arrangement fee and free property valuation
  • 4.49 x times salary income multiple
  • £500,000 maximum loan
  • Available to the self-employed
  • Not available on flats, new build properties or in Northern Ireland
  • 5% deposit mortgage
  • 4.05% - five year fixed term with no product fee
  • Reversion rate 4.09% and 4.20% APRC
  • Minimum loan size £150,000 and maximum loan size £500,000 (including fees)
  • Available to first-time buyers and movers, whether employed or self-employed, right across the UK. 
  • New 5% deposit residential product for first- time buyers only.
  • 4.17% five-year fix and no product fee
  • Reversion rate 4.64% and 4.60% APRC
  • Maximum loan amount is £450,000
  • 4.49 x times salary income multiple
  • 50% of additional income can be included (two years of evidence).

Source: Skipton, Bank of Ireland and Accord's email update

Call Trinity Financial on 020 7016 0790 to secure a first-time buyer mortgage or book a consultation

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