I want to explain some options which may help first time buyers finally get themselves on the property ladder without having to save up a 5% – 10% deposit to do so.

At Mortgage Advice Bureau, we have access to over 90 lenders across the UK and there are now a handful of lenders available through ourselves that allow First Time Buyers to purchase a property with as little as 1% deposit.

These mortgage products could help those looking to buy a house in the near future but struggling to get a large enough deposit over £5,000. A lot of first time buyers we speak to have some sort of savings put away but are having to save up for a long time, others are lucky enough to get a gift from family to help, so these products open up a chance for home ownership sooner than you may think.

As always with any mortgage borrowing there is standard criteria, credit and affordability checks to be met, however here’s some key information about these products:

Accord:

– Available to First Time Buyers only
– Minimum deposit £5,000
– Minimum loan amount £95,001 and minimum purchase price £100,001
– Loan to value 95.01% – 99%
– Available only on a 5 year fixed rate
– Maximum age at end of the term is age 70
– Not available on new build homes
– Houses only, no flats
– Maximum purchase price of £500,000
– For joint applications, only 1 person must be a First Time Buyer

Here’s an example of a typical mortgage with this product:

– Purchase price – £150,000
– Deposit – £5,000
– Mortgage amount £145,000
– Mortgage term of 35 years
– Mortgage payment of approx. £777 per month

Another lender that has recently came to the market with a similar offering via ourselves is Newcastle Building Society, their criteria is as follows:

– Available to First Time Buyers only
– Minimum deposit £5,000 or 2%, whichever is higher
– Minimum loan amount £96,000 and minimum property value £101,000
– Loan to value 95.01% – 98%
– Maximum term 35 years or age 70 at end of term
– Not available on new build homes or ex local authority flats
– Maximum loan size £350,000
– For joint applications, only 1 person must be a First Time Buyer

Another innovative product on the market, which has been around for about 2 years, is the 100% mortgage by Skipton Building Society, called the Track Record Mortgage. These mortgages are designed to allow first time buyers who have a track record of paying rent and household bills to finance the entire purchase price of the property, eliminating the need for any deposit.

Some key criteria for this one is:

– Applicants must not have owned a property in the last 3 years or be first time buyers
– Each applicant must be 21 years or over
– If there is a deposit available, it should be less than 5% of the purchase price
– Available on houses and non new build flats
– Maximum mortgage loan of £600,000
– Applicants must have proof of paying rent for at least 12 consecutive months within the last 18 months
– Applicants must have 12 months worth of evidence in paying all household bills within the last 18 months

Again this could help people who have been stuck paying high rent and unable to save a deposit but have the ability to show they have met their rent payments and other commitments consistently over a period of time.

It’s important for potential borrowers to carefully consider the pros and cons of these mortgages before making a decision. You should think about your individual circumstances and how much you can afford and seek advice from mortgage experts so they can help you to make the right choice.

Your home may be repossessed if you do not keep up repayments on your mortgage.