The £5k Deposit Mortgage was launched in 2024 and allows borrowers to purchase a property worth up to £500,000 with a deposit of just £5,000.
Accord Mortgages, Yorkshire Building Society’s intermediary-only lending arm, widened the availability of the £5k Deposit Mortgage to flats in February this year.
The firm said the product has been “very popular among its specific first-time buyer target market”.
Yorkshire Building Society said the launch of the product had led to further first-time buyer product launches, such as the stamp duty cashback product, which offers £6,250 cashback to help first-time buyers with increased costs from changing thresholds from 1 April.
Ben Merritt, director of mortgages at Yorkshire Building Society, said: “Launching this product and seeing the effect it has had has been so humbling and has really brought home to us the fact what we do is not just about bricks and mortar – it’s enabling the life aspirations of real people and helping them build their dreams.”
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Case study: Leona and Mark from Aberdeen
Leona McKay and Mark Pennie, aged 25 and 26 respectively, moved into their three-bedroom family home in Aberdeen at the end of April 2024, thanks to Yorkshire Building Society’s £5k Deposit Mortgage.
They had been living in a second-floor, two-bedroom council flat with two dogs and a cat.
With the help of the £5k Deposit Mortgage, they were able to surpass the barrier of raising a deposit and upfront costs of up to £20,000 for the £160,000 home.
The couple worked closely with Laura from Gail Reid Mortgages to secure a deal.
Pennie said: “It’s definitely changed a lot of things. We’re more content and there’s not this whole wishing our life away anymore because it’s here. We’ve got the house and it’s that fresh start.”
McKay added: “It means we can stop planning, start living and move forward finally. We always said we wouldn’t have kids in the flat because carrying a buggy up three flights of stairs, with two dogs and a bag of shopping, was no good.
“Now we can actually start to imagine our future, plan to get married and think ‘this is where our kids will go to school’ and ‘this is where they’ll play in the park’.”
Case study: David and Natalie Adamson from Durham
David and Natalie Adamson, aged 38 and 34 from County Durham, who have two children, struggled to save for a deposit due to rental payments of £675 per month.
They applied for a £5k Deposit Mortgage to borrow £230,000 to buy a four-bed detached house.
David explained: “The income wasn’t a problem as we both work full-time, but before the £5k Deposit Mortgage came along, we just couldn’t save a big-enough deposit to buy somewhere.”
Natalie added: “It’s changed our lives. We’re now in a better house, in a better area for our kids, and we have a better social life, being closer to family and friends. The payments are higher than what we were paying in rent, but we can comfortably afford them and it’s worth it to invest in our future.
“Every now and then, we still come downstairs in [the] morning and tell each other we can’t believe we’re here.”
