As of Wednesday the 17th of March, 2021, Accord mortgages, which acts as an intermediary for Yorkshire Building Society, will offer first-time buyers a mortgage with just a 5% deposit requirement.
Accord Mortgages become first lender to launch 5% deposit mortgages since the pandemic
Additional lenders are set to launch 5% deposit mortgages soon
Accord Mortgages want to help people own their own home
Managing Director of Accord Mortgages, Jeremy Duncombe, said: “As more lenders join us in the 95% LTV mortgage market, either with or without the mortgage guarantee scheme, we’re hopeful buyers with just a 5% deposit will be able to benefit from a more sustained offering in the market.
Part of our purpose as one of the UK’s largest building societies is to help people own their own home, and the unique challenges of the last year have made that harder than ever for some.”
He went on to say, “Increasing house prices, the need to save for a larger deposit and limited choice in the higher LTV markets, means the goal posts have continually moved for many.
This new 95% mortgage will give brokers another option to help clients with smaller deposits realise their home ownership ambitions.”
Government-backed 5% mortgages coming soon
You may remember that the Conservative Party recently announced plans in their 2021 budget to launch government-backed mortgages with 5% minimum deposit requirements, in a bid to “end generation rent” and stimulate the property and construction sectors.
Government-backed mortgages are set to be available from April onwards and many lenders including Lloyds, Natwest, Santander, Barclays and HSBC will offer the mortgages. Rishi Sunak’s budget announcement also gave hope that additional lenders will follow suit with the Chancellor saying that others would “'follow shortly after'.
How do the two differ?
While the government-backed scheme is available to house movers too, the 5% deposit mortgages available via Accord have criteria that stipulates that one applicant must be a first-time buyer.
New builds and flats are also off the card if you’re thinking about getting a mortgage with a 5% deposit via Accord, but those hoping to take advantage of falling flat prices may be able to get a mortgage via a lender who utilises the government-backed initiative.
Here’s how a government-backed mortgage differs from the 5% mortgages via Accord Mortgages:
Government-backed mortgages available from various lenders:
How much would a 5% deposit be for a mortgage with Accord Mortgages?
The amount of your deposit, whether 5% or not, will depend on the amount of money you’re eligible to borrow and subsequently, the price of the property you’re planning to buy.
Different types of property and the areas in which they stand, can demand varying market prices too.
In fact, the average price for a terraced house in Hampshire, is £272,816 as reported by Rightmove. A 5% deposit would cost a first-time buyer £13,640.80 whereas a semi-detached property in Gloucestershire averages at £294,439, meaning a 5% deposit would cost £14,721.95.
Flats typically sell for less, so some buyers may consider holding off until government-backed mortgages which do allow borrowers to buy flats are back.
Government-backed mortgages or non-government backed mortgages?
Whatever your decision, we’re here to help.
Our mortgage brokers can check your eligibility for a range of mortgage products, including Accord Mortgages.
Your circumstances including your income, age, employment status and bad credit can all affect the type or mortgage you can take out and the terms under which it is offered.
They can also advise you on whether it could be better for you to proceed now and take advantage of the deal which “may be withdrawn at relatively short notice” according to Jeremy Duncombe, MD at Accord Mortgages, or wait until government-backed 95% mortgages come to the market from April, 2021.
Our team takes the people they help through the process, always communicating the next steps and the progress of a mortgage application.
Call today or if you’d prefer, fill out our short contact form and the right person to help with your specific enquiry will call you back at a time suitable for you.