The Yorkshire Building Society has launched 90% mortgages, aimed at first-time buyers and existing homeowners who have been squeezed by the mortgage crunch. It allows buyers to borrow on pre-owned flats and houses, but not new build properties.
This move from one of Britain's biggest building societies will be a ray of hope for borrowers, who have seen the amount of 90% LTV mortgages decrease by 90% since March this year.
There are now just 78 deals from a handful of lenders that offer 10% deposit mortgages, as many banks and building societies slashed high loan-to-value mortgages after the pandemic hit.
However, with a 3.69% two-year fixed rate, and a 3.79% five-year fixed rate, the Yorkshire Building Society's deal will cost borrowers considerably more than what's on offer to those with bigger deposits. Comparatively, those buying with 40% deposits are eligible for two-year fixed rates below 1.3%, and five-year fixes below 1.5%.
David Hannah, principal consultant at Cornerstone Tax, said: “First-time buyers are in a tougher position than ever, as low-deposit mortgages were effectively wiped out by the pandemic, and its resulting lockdowns.”