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The 99% Mortgage is Here!


99% mortgages are here!

This morning has seen the release of one of the most innovative products for some time, with Accord / Yorkshire Building Society launching an interesting new mortgage product available for First-Time Buyers with just a £5,000 deposit.

Available up to £500,000 this means that some borrowers will be able to get a 99% mortgage.

The full details of the scheme are as follows:

  • The product is a five-year fixed rate at 5.99%
  • Available to first-time buyers only
  • Minimum deposit requirement £5,000
  • Maximum property value £500,000
  • Available on a capital and interest basis only
  • Maximum age at end of mortgage term 70
  • Available on residential house purchases only
  • Not available for purchasing flats or new build properties
  • Subject to rigorous credit scoring and affordability checks.

Their analysis showed a deposit of £5,000 – compared to a typical 5% – would make a huge difference to first-time buyers across the country by reducing the time it takes them to save up and achieve homeownership, from a maximum of 7.5 years (in London) to around 2.5 years.

Although some may be wary about borrowing at a high Loan-to-Value, (LTV) which could mean a greater exposure to the risk of negative equity if house prices fall, the fact that it is at least a repayment mortgage with an initial 5-year fixed term, should mean this risk is reduced somewhat as the loan will be reducing.

Andrew Montlake, MD at Coreco mortgage brokers commented, “It is refreshing to see a lender take the bull by the horns and release an innovative scheme to help first-time buyers, and this should do just that.

“We speak to many potential buyers who in theory could afford a mortgage, but struggle to save the high deposits needed, especially when faced with rental costs that are often more than what the monthly mortgage costs would be.

“This has been exacerbated over the past few years as property prices have remained high, and as a result, we are starting to see property ownership becoming the preserve of those lucky enough to have additional family funding, whilst those who do not, remain trapped in an ever more competitive private rental sector.

“Owning your own home remains the dream for many, and in offering a mortgage with a deposit of £5,000, this will open the doors to more buyers who had been starting to give up hope of owning in the near future.

“Whilst this alone will not solve the issues around home ownership, and some borrowers may not qualify given the fact that prudent lending and affordability rules are still rightly front and centre of this scheme, it is nevertheless a start and shows what a forward-thinking lender can do when they have some innovative flair and a passion for their market.”

To find out more and speak to one of our friendly, down-to-earth advisers click here or call us on 020 7220 5110.

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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