First Time Buyer Mortgages with a £5,000 deposit

[northernladuk]

FWIW I think it’s a good product for those FTBs who can’t (or don’t want to) put in a bigger deposit. The more products there are in the market, the more choice borrowers have.

There seem to plenty of guardrails to minimise the chances of negative equity - no new build, no flats, no NI, 4.5x max income multiple, term capped to 70 (plenty of lenders will go to 75 and 80).

It's the arse end of the products you should be looking at though. They mention the fact that they lender is contractor friendly but that's about all that is useful here. The general audience on here is most certainly not looking for a product like this so hardly relevant.

[northernladuk]

The best rates on the market for a 5 year fixed rate with a 40% (!!) deposit are around 4.15% at the moment, so yes, this rate is a fair bit higher but on a £500,000 property, the deposit requirement to get those kind of rates are £200,000, the £5,000 requirement for this new mortgage is obviously significantly less.

We would always recommend to clients that putting down a bigger deposit, even 5% or 10% would always be beneficial to the interest rate they could obtain and therefore the overall interest they pay, but nonetheless, this product could serve a purpose for some who may be struggling to save at the moment or if a specific opportunity to acquire a property they would ideally like presented itself before they were able to save the ideal deposit they would like to put down.

Must be a London thing. Up Norf no one in their right mind would be taking a 500k mortgage with only 5k deposit on those rates. That's a very good family home level up here which is highly likely to mean they'll have cash from existing property, two people with deposit and a massive risk to take on if they aren't already grounded.

Lot of 'could's' in all this. Wrong product for the denizens.

[TheMortgageSquad]

Got to say the only thing I’m seeing here is reasons to go elsewhere.

If this is your sales pitch good luck …

This isn't a sales pitch, I'm sharing industry news which I thought would be of interest to some people and spark discussion. Even if the mortgage itself is not of interest to anyone on here, it is very likely that this mortgage will help a few people who otherwise may have been struggling to sell their property, to finally sell it if the buyer happens to be someone who would be interested in this product.

This mortgage product will boost the number of house sales in what has been a very stagnant housing market of late.

Yes the rate is high but given the interest the product received thus far from would be first time buyers, it's clearly something which will help some people.

[TheMortgageSquad]

Must be a London thing. Up Norf no one in their right mind would be taking a 500k mortgage with only 5k deposit on those rates. That's a very good family home level up here which is highly likely to mean they'll have cash from existing property, two people with deposit and a massive risk to take on if they aren't already grounded.

Lot of 'could's' in all this. Wrong product for the denizens.

Whilst I appreciate being a contractor isn't geographically restricted to a set area, a large number of contractors I have dealt with in my years have been based in and around London. Perhaps that has changed a little more since Covid days and working from home being a lot more popular nowadays.

I get that the majority on here would likely have larger savings and in a lot of instances, already be homeowners so this specific product may not be of relevance in terms of any potential homebuying plans CUK Forum member may have but it is still news I thought would be of interest with regard to the wider picture of the housing and mortgage market.

I agree, it is very unlikely anyone up North would be looking at a £500,000 purchase with only a £5,000 deposit but someone looking to buy their first home at £150,000 may find this product particularly useful and if that enables the person selling what was originally their first home for £150,000 to sell it to that first time buyer, it will then enable that home mover to buy their next property further up the property ladder so will have a positive impact on the market as a whole.

[northernladuk]

This isn't a sales pitch, I'm sharing industry news which I thought would be of interest to some people and spark discussion. Even if the mortgage itself is not of interest to anyone on here,

This is your problem.

[sreed]

It's the arse end of the products you should be looking at though. They mention the fact that they lender is contractor friendly but that's about all that is useful here. The general audience on here is most certainly not looking for a product like this so hardly relevant.

That’s your opinion, fair enough.

Half the things I enjoy on the UKCF forum aren’t strictly ‘relevant’ to me but I follow it for entertainment and knowledge. Prior to coming across this thread, I didn’t know that you could get a mortgage with less than 5% deposit and no guarantors, now I do. So that’s good enough for me.

You might think it ‘arse end’ but I think at 6% it’s fairly priced and innovative for what it is - a mortgage which requires well below a 5% tiny deposit.

[Snooky]

This is your problem.

Do you think you speak for all contractors on here? Do you know the financial circumstances of the average member, or are you basing your opinion only on the few folks who seem to spend their lives chatting on these boards?

I'm fortunate enough to be an old fogey who's managed to pay off their mortgage and hopefully you're not struggling financially either, but not all contractors are on megabucks and this may be of interest to them, even just as a way to get their foot on the ladder.

The product is of no interest to me but I don't really see why everyone's jumping down TheMortgageSquad's throat, especially as they're not actually trying to flog anything.

[northernladuk]

The product is of no interest to me but I don't really see why everyone's jumping down TheMortgageSquad's throat, especially as they're not actually trying to flog anything.

It's as close as it comes but don't ask me, ask Cojak, who's made her opinion very clear.

[TheMortgageSquad]

It's as close as it comes but don't ask me, ask Cojak, who's made her opinion very clear.

I'd be keen to understand why you feel it is as close as it comes? I'm sharing news which as some kind posters above have alluded to, was not common knowledge. As I have previously said, regardless of whether this mortgage directly interests you or not, the fact this product exists will likely have a positive impact on the housing market. I believe having seen previous posts of yours that you own property so therefore you have an interest in the property market. If you are ever likely to sell property then you'd want the market to be buoyant to be able to get the best price for your property and to sell it relatively quickly and innovative products like this may help people achieve that.

I know you may not be interested in this mortgage or even looking to buy/sell at the moment but there are others out there who may be.

I have separately DM'd Cojak to ask her why she took umbridge toward me personally for posting the original post which I must admit, I found a little strange. I am not advertising which I am fully aware I am not allowed to do. Other Contractor Mortgage Broker specialists on here have posted mortgage and interest rate related 'news' posts in the past and not been chastised for it and I am struggling to see why this is any different. I am not the one loaning out the money, nor am I the one who sets the rates or asking for people to contact me.

The last paragraph in the original post was aimed at pointing out that this will help first time buyers which could inject some much needed interest in a housing market which has been deflated for some time now, a talking point I thought would be of interest to share.

[pr1]

I agree it's interesting news and probably useful for a lot of people, not everyone is in their 40s and 50s+ with built up savings and multiple properties... northernladuk does not and should not speak for the hundreds/thousands of users browsing these forums just because he has an innate need to comment on almost every thread