Surprise news for first-time buyers!
Accord Mortgages and Yorkshire Building Society have launched a brand new mortgage product that lets you step onto the property ladder with a deposit of just £5,000. That’s right, you can finally ditch the housemate and snag your own place without needing a huge chunk of cash upfront.
Personally I am very surprised to see this. Lenders have had to be poked by the government to lend with a 5% deposit in recent years, let alone £5k! Lenders have been fearful of house prices and potential for negative equity since the last recession. Hopefully this is a show of confidence in UK house prices? Anyways, here are the details:
Here’s the lowdown:
- Tiny Deposit, Big Dreams: All you need is £5k to get started. This is a significant shift from the usual 5% minimum deposit we’ve seen in recent years.
- There’s a Catch (of Course): This offer isn’t for everyone. You’ll need a squeaky clean credit history (think spotless payment records and no black marks). Additionally, at least one applicant must be a true first-time buyer with no past property ownership.
- Product Perks and Limitations: This is a 5-year fixed-rate mortgage, meaning your interest rate is locked in for the first five years. The minimum property value is £100,000, and the maximum is capped at £500,000. There’s also a limit on how much you can borrow – a maximum of 4.49 times your income. Keep in mind, this is a Capital & Interest product only, so you won’t be chipping away at the principal amount with your monthly payments.
- Seek Professional Help: This new mortgage isn’t a one-size-fits-all solution. Get advice from a qualified mortgage broker to see if it aligns with your financial goals and situation. Remember, there are always risks and rewards associated with any mortgage, so make sure you understand everything before diving in.
Word to the Wise:
As with any mortgage, failing to make your payments could lead to repossession of your property. So, make sure you can comfortably afford the monthly payments before taking the plunge.
This new £5k deposit mortgage could be a game-changer for many first-time buyers. But remember, proceed with caution and get expert advice to ensure it’s the right move for you.
