Newcastle for Intermediaries has unveiled a new mortgage product designed to help first-time buyers onto the property ladder with deposits as low as £5,000.

The new proposition, branded First Step, offers lending up to 98% loan-to-value with a maximum loan size of £350,000. It will initially be available through London and Country Mortgages, Connells Group and Mortgage Advice Bureau from September.

The five-year fixed rate is priced at 5.25% with a representative APRC of 6.2%. The product comes with a free standard valuation on properties worth up to £550,000 and permits annual overpayments of up to 10%.

Francesco Di Pietro (pictured), head of intermediary mortgages at Newcastle Building Society, said: “We know how hard it is for many first-time buyers to build a large deposit in today’s housing market. First Step has been designed to give people who have worked hard to save a cash deposit a realistic route into home ownership, while ensuring robust affordability and lending criteria.

“We’re pleased to bring this practical, intermediary-focused solution to market and to support brokers in finding the right outcomes for their clients.”

Sidney Wager, managing director at L&C Mortgages, added: “L&C Mortgages is delighted to partner with Newcastle Building Society in its launch of the First Step product, ahead of its full market release.

“We know that first-time buyers continue to face significant difficulty in building a big deposit to stand a chance of buying. This will allow L&C advisers to find a solution for more first-time buyers, who can afford to buy but may only have a smaller cash deposit.

“It’s a practical step towards broadening routes to homeownership, harnessing the value of advice to ensure positive outcomes for customers.”