New mortgage is much better for first time buyers – and will even give you cashback
A NEW mortgage allows first-time buyers to put down just a five per cent deposit — and get £250 cashback.
But Leeds Building Society’s move is likely to spark concerns about another property bubble.
The last financial crisis in 2008 was partly driven by banks lending to buyers who could not afford their loans.
Mortgages with cashback typically have much higher interest rates than those without and usually require buyers to put down a bigger deposit.
The housing market has been sluggish since last year’s mini budget chaos sent interest rates shooting higher, making mortgage repayments more expensive for millions.
Leeds’ new mortgage has a two-year fixed rate of 5.69 per cent, a free valuation and the £250 cashback on completion.
Jonathan Thompson, senior mortgage manager at Leeds Building Society, said: “Borrowers with smaller deposits remain a key focus for us, as we seek to deliver on our purpose to put home ownership within reach of more people.
“We’re seeing strong demand for fixed rate higher loan-to-value mortgages and, with cashback on completion, we expect this latest deal to appeal particularly to first-time buyers.”
Last month, Skipton Building Society launched the first 100 per cent mortgage since the 2008 credit crunch.