Low deposit mortgages
Prospect Mortgage Services provide independent, sound and honest advice for your mortgage and protection needs.
Call our team:
01983 616666
Several lenders now offer mortgage loans with a fixed £5,000 or £10,000 deposit. This means First Time Buyers (or in some cases joint applicants, where one person is a first-time buyer) can get on the property ladder with lower levels of savings than would customarily be required to reach a minmum 5% threshold.
How it works
- Often a minimum property purchase price is required (e.g. at least £101,000) and most lenders have an upper limit on property purchase price also (e.g. £500,000)
- At least one of the applicants must be considered a ‘First-time buyer’
- Some lenders require you to fix your mortgage with them for the first 5 years
- Exclusions on the type of property included in this scheme may apply (e.g. new-build properties)
- Some lenders do not accept all types of deposit under this scheme (e.g. gifted deposits)
Things to consider
High Loan-to-Value ratio’s (comparing the value of your mortgage to the value of your property) can result in ‘Negative Equity’. Negative Equity refers to a situation where the value of your property has decreased due to market conditions or circumstances, meaning you owe more than your property is worth.