Accord Mortgages launch new 1% deposit mortgage for first-time buyers with just £5k deposits

by Aaron Strutt

Mar 27 2024

Accord Mortgages and Yorkshire Building Society (YBS) have launched a new and innovative £5,000 minimum deposit mortgage. 

To qualify, applicants will need a deposit of between 5% and 1% of the purchase price and have a sufficiently large income to meet the lender's mortgage affordability calculations. 

The minimum mortgage amount is £95,000, and the maximum mortgage loan size is £495,000. This means the product is available for house purchases between £100,000 and the current maximum of £500,000.

Accord Mortgages in the broker lending arm of the Yorkshire Building Society. 

Who is Accord's new low deposit for?

• At least one applicant must be a first-time buyer, defined as never having previously owned a property. The application cannot include background properties like buy-to-lets.
• First-time buyers with a minimum £5,000 deposit.
• Borrowers with a higher credit score - typically equivalent to the mortgages available for those with a five per cent deposit.

What else do you need to know about the new low deposit scheme?

• It is available for house purchases and no newly built properties or flats.
• Accord offers a five-year fixed rate just below 6% with £0 arrangement fee and a free property valuation. 
• It is available for loan-to-values between 95.01% loan-to-value and 99% loan-to-value.
• House purchases must be above £100,000 and up to £500,000.
• The minimum mortgage amount is £95,000, and the maximum loan size is £495,000.
• The maximum income multiple applied is 4.49x single or joint incomes. 
• It is only available for capital repayment mortgages.
• Up to 10% of the mortgage can be repaid each year without charge.
• There is a maximum age of 70 at the end of the mortgage term.
• Early repayment charges apply on a sliding scale that is reduced each year.

Aaron Strutt, product director at Trinity Financial, says: “A similar 1% deposit mortgage scheme was expected to be announced during the latest budget, but it was pulled. Accord and Yorkshire Building Society have launched it after working hard to develop the product.

"It is good news that borrowers have another low-deposit mortgage available, and it may tempt other lenders to offer similar products. Accord's new product has some criteria, so first-time buyers will have to meet them to qualify.

"Banks and building societies typically want a five- or ten-percent deposit, which is quite a shift from this new product, which probably has been designed to compete with Skipton’s 100% mortgage." 

Yorkshire Building Society director of mortgages Ben Merritt (pictured) said research by the society indicated that £5,000 could shorten the time needed for first-time buyers to get mortgage-ready. He added that it could help to encourage a “level playing field for those who don’t have financial support from their families to fall back on.”

Call Trinity Financial on 020 7016 0790 to secure a low deposit first-time buyer mortgage, book a consultation, or complete our mortgage questionnaire. 

The information contained within was correct at the time of publication but is subject to change.

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