Leeds Building Society has introduced a new 98% loan-to-value mortgage designed to help more first-time buyers overcome affordability barriers and secure a place on the property ladder.
The lender’s new Start Mortgage is available through intermediary partners and combines lending of up to 98% loan-to-value with borrowing of up to five times household income, in a move intended to support buyers struggling with high house prices and deposit requirements.
The product forms part of Leeds Building Society’s ongoing focus on improving access to homeownership and is aimed at borrowers who have found it difficult to meet affordability criteria in the current market.
The Start Mortgage is available on five-year fixed rate products and offers lending up to a maximum of £500,000. Applicants must have a minimum household income of £30,000 and provide a minimum deposit of £5,000.
The mortgage is also available to self-employed applicants, while gifted deposits are accepted.
The initial product is a five-year fixed rate available until 31 October 2031, priced at 5.65%. It has no completion fee and includes a free standard valuation.
Leeds said a single or joint applicant with a household income of £49,000 and a £5,000 deposit could borrow £245,000 to purchase a £250,000 property, representing 98% loan-to-value.
Martese Carton, director of mortgage distribution at Leeds Building Society, said: “Affordability continues to be one of the biggest barriers facing first-time buyers today.
“With our new Start Mortgage, we’re combining higher loan-to-value lending with flexible income multiples to better reflect earning potential and housing costs.
“We know there is no one-size-fits-all approach, which is why we’re committed to supporting brokers in finding solutions for their clients.
“We’re proud to be able to support aspirational buyers in getting a home of their own and keeping them there by following prudent affordability assessments to ensure they aren’t overstretching themselves.”
David Hollingworth, associate director at L&C Mortgages, added: “The desire to buy a first home remains strong but prospective first-time buyers are all too aware of the challenges that remain. Being able to borrow enough and demonstrate affordability whilst also saving a sizeable deposit is far from easy.
“Products like the new Leeds Start Mortgage offer alternative options for advisers and their customers.
“Combining a small deposit requirement of just £5k with a realistic approach to affordability helps to tackle those challenges head on. That could make a real difference for aspiring first-time buyers and turn the hope of homeownership into a genuine possibility.”
