Leeds Building Society has launched the Start Mortgage, a new product enabling first-time buyers to purchase a home with a deposit as low as 2%. The mortgage allows borrowers to access loans worth up to five times their income, subject to affordability assessments.
Key Features of the Start Mortgage
The deal requires a minimum deposit of £5,000, meaning the 2% deposit applies only to homes valued at £250,000 or more. The maximum loan size is £500,000, and a minimum income of £30,000 is required. The mortgage is available through brokers or directly with Leeds Building Society.
Self-employed individuals are eligible, and gift deposits from family members, such as the “bank of mum and dad,” are accepted. The five-year fixed rate product carries an interest rate of 5.65%, with a free standard valuation and no completion fee.
Impact on First-Time Buyers
Matt Bartle, director of mortgages at Leeds Building Society, said: “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. According to Leeds Building Society, this product aims to address the primary challenge faced by first-time buyers: saving for a deposit.
