Yorkshire Building Society and Accord Mortgages, Yorkshire’s intermediary arm, have boosted the number of mortgage options available to first-time buyers.
The minimum deposit needed for new build home purchases has been reduced to 5% down from 10%, and the maximum amounts Yorkshire and Accord will lend have also increased.
Homebuyers with a 5% deposit buying property other than new build flats can now borrow up to £750,000, up from £600,000 previously. The maximum loan amount for all property types for those putting down a deposit of between 10% and 15% of the property value is going up from £750,000 to £1 million.
Ben Merritt, director of mortgages for Yorkshire Building Society, said: “Property values have increased by around a quarter over the past five years and this makes it increasingly difficult for some customers – particularly those living in house price hotspots - to secure mortgages big enough for their desired homes. This leaves them needing to raise a size of deposit to bridge the gap which is unrealistic for many, or simply takes too much time.
“Increasing the amounts we will lend ultimately helps them achieve their homeownership goals faster.”
For those with larger deposits, there are even greater borrowing opportunities: Buyers borrowing more than 75% but up to 85% of the property’s value can access loans up to £2.6 million, up from £2 million for non-new builds and from £1 million for new builds.
Mr Merritt said: “We know many buyers are attracted to new-build homes because they tend to offer the latest energy efficiency standards and require less maintenance. Therefore, as well as increasing our maximum loan sizes for new build and non-new build homes, we have reduced our minimum deposit requirements for new-build properties to make this option possible for more people.”
The building society already offers mortgage products which are specifically designed to support homebuyers who are finding it difficult to save a deposit. The £5k Deposit Mortgage, for example, allows people to borrow up to £500,000 with a deposit of just £5,000, and has recently been expanded to include flat purchases. The maximum mortgage term available is 40 years, and the buyers can borrow up to 99% of the property value.
