Leeds Building Society has launched a new mortgage product, the Start Mortgage, which allows first-time buyers to purchase a home with a deposit as low as 2%. The mortgage is subject to affordability assessments and is available through brokers or directly with the society.
Key Features of the Start Mortgage
Borrowers can access loans worth up to five times their income. The deal requires a minimum deposit of £5,000, meaning the deposit would be as low as 2% only for homes worth £250,000 or more. The maximum loan size is £500,000, and a minimum income of £30,000 is required. Self-employed individuals can also apply, and gift deposits from family are accepted, allowing the “bank of mum and dad” to contribute.
Interest Rate and Fees
The five-year fixed-rate product has an interest rate of 5.65% and includes a free standard valuation with no fee payable on completion. This competitive rate aims to ease the financial burden on first-time buyers.
Expert Commentary
Matt Bartle, director of mortgages at Leeds Building Society, stated: “Saving for a deposit remains one of the biggest hurdles for first-time buyers. By reducing that barrier to just 2% and combining it with flexible lending criteria, we’re helping more people move closer to owning their own home.”
Rachel Springall, a finance expert at Moneyfacts, commented: “The Start Mortgage is a rare 98% loan-to-value deal and as applicants can borrow up to five times their income, this launch could make a meaningful difference for would-be homeowners who might otherwise remain stuck in the rental cycle.”
Market Context
Other lenders also offer low or no deposit mortgages to assist first-time buyers, but the Start Mortgage stands out due to its combination of a low deposit requirement and high income multiple.
