Yorkshire launches 10 per cent deals to help first- time buyers

FIRST- TIME BUYERS have been given a boost as a major building society has started offering 10 per cent deposit mortgages once more.

Low deposit deals have become much more scarce since the coronavirus crisis started, as lenders are concerned about the possibility of house prices falling and the deteriorating state of some borrowers’ finances.

Yorkshire Building Society, which has launched the deals, said it hopes the new range will give borrowers with smaller deposits more choice in what is currently a limited market.

Along with many other lenders, Yorkshire withdrew its 10 per cent deposit deals over the summer, and has been offering 15 per cent deposit deals in the meantime.

The Yorkshire’s new deals, aimed at first- time buyers and existing home owners who want to move or re- mortgage, include a two- year fixed- rate deal at 3.69 per cent and a five- year fixed- rate at 3.79 per cent.

Both deals have a product fee of £ 995. The society said its house purchase mortgages come with a free standard valuation, and those looking to re- mortgage can benefit from paid legal fees.

Ben Merritt, senior mortgage manager at Yorkshire Building Society, said: “We know it’s been a really tough few months for borrowers with smaller deposits but hope returning 90 per cent LTV mortgages to our core range will provide a welcome boost to people wanting to get on to, or move up, the property ladder.”

The Yorkshire’s intermediary arm, Accord Mortgages, also offers 10 per cent deposit mortgages.

According to

Moneyfacts. co. uk, the average two and fiveyear fixed rates currently on the market in the 10 per cent deposit bracket are 3.71 per cent and 3.86 per cent respectively.

There are now 78 mortgages on the market for those with a 10 per cent deposit – an improvement on the 56 at the start of November, according to Moneyfacts.

But this is still around a tenth of the 779 deals available at the start of March.

Rachel Springall, a finance expert at Moneyfacts. co. uk, said in terms of the larger lenders currently offering 10 per cent deposit mortgages, the addition of Yorkshire Building Society is a big boost to the market.

She said: “More 90 per cent loan- to- value products have been launched onto the market this month so it’s further good news to see Yorkshire Building Society launching these new deals.”