Mortgage Solutions caught up with the mutual’s director of mortgage distribution to discuss its launch of a 98% loan-to-value (LTV) mortgage.
The five-year fixed product launched today and is open to single or joint applicants earning at least £30,000 with a minimum £5,000 deposit.
Tell me how Leeds Building Society came to the decision to launch this product.
Our purpose is to put homeownership within reach of more people, generation after generation, so our starting point is always understanding the barriers that are holding people back from achieving this.
Time and again, we hear from brokers that aspiring first-time buyers are not struggling because they can’t afford the monthly mortgage repayments, but rather because saving a large deposit has become increasingly difficult.
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We looked closely at those challenges and asked ourselves what practical changes we could make to help more people take that first step. The result is our Start Mortgage, which combines a higher LTV with enhanced borrowing potential, while maintaining a responsible approach to affordability.
This launch is another example of our commitment to finding innovative solutions that align with our purpose and supports brokers in helping their clients achieve their goals.
What challenges, demands or needs will the product address?
The biggest challenge facing many first-time buyers today is the ability to save for a deposit. The increasing cost of living means that aspirational homeowners today are facing higher costs and building a substantial budget is arguably more difficult than ever.
Our Start Mortgage range has been designed to address those realities. By offering up to 98% LTV and lending up to five times household income, we’re helping to bridge two of the most significant hurdles buyers face: raising a deposit and accessing sufficient borrowing.
We are also lowering minimum income requirements to £30,000 to ensure the range is available to even more people. This product is designed to support more would-be buyers and give them a realistic route onto the housing ladder.
There have been a few 95%-plus LTV launches in the last few years. Is it fair to say this is a growing area of the market?
Yes, I think it reflects a growing recognition across the industry that we need to find new ways to support first-time buyers. Lenders understand that affordability challenges have evolved, and products with higher LTV ratios can play an important role in helping creditworthy customers access homeownership sooner. But there is more to be done.
That’s why we are combining 98% LTV with competitive salary requirements and income multiples, and a higher maximum loan size of £500,000.
It’s encouraging that we’re seeing greater innovation in this space, whether that’s through higher-LTV lending, alternative affordability approaches or products designed around specific customer needs. It’s a positive development because it means more people may have options available to them, provided those solutions are delivered responsibly.
Do you foresee 95%-plus LTVs becoming a mainstay in the market?
I believe higher-LTV lending will continue to have an important role to play, particularly as the industry looks for ways to support future generations of homebuyers. That said, these products won’t be the right solution for everyone and should sit alongside a broad range of mortgage options. The key is ensuring that lending remains sustainable and that customers can comfortably afford their repayments both now and in the future.
If lenders can continue to balance innovation with robust affordability assessments, then I can certainly see higher-LTV products remaining an established part of the market and helping more people achieve homeownership.
What kind of first-time buyers do you expect this product to be suitable for?
We expect Start Mortgage to appeal to a broad range of first-time buyers, including single applicants, couples, and self-employed customers with strong incomes but limited savings for a deposit.
It may be particularly relevant for people who have demonstrated an ability to manage significant monthly housing costs through renting but have found it difficult to save while keeping up with day-to-day expenses.
This is about supporting aspirational buyers who are financially responsible and ready for homeownership but need a little more help overcoming the deposit barrier.
How do products like these encourage potential first-time buyers who feel locked out of the market?
For many people, getting onto the housing ladder can feel like an unattainable goal. The longer it takes to save a deposit, the more challenging it can become if house prices continue to rise during that period.
Products like the Start Mortgage range help to change that conversation. They demonstrate that there are options available for buyers who may previously have assumed homeownership was out of reach.
By reducing the size of the deposit needed and increasing access to borrowing where appropriate, we’re helping to create achievable pathways into homeownership and giving people greater confidence to explore their options with a broker.
How do products like this help to stimulate the market?
A healthy housing market depends on people being able to move through it at every stage. First-time buyers are particularly important because they often form the foundation of property chains.
When more first-time buyers can enter the market, it can help unlock activity across the wider housing sector. Existing homeowners can move on, more transactions can take place, and overall market confidence can improve.
From our perspective, supporting first-time buyers isn’t just about helping individual customers. It’s also about contributing to a more accessible and sustainable housing market that works for future generations. That’s why we’re committed to continuing to explore responsible lending solutions that make a meaningful difference.
