What is the New £5000 Deposit Scheme?

A new £5000 deposit scheme allows first-time buyers to borrow up to 99% of a property’s value. This scheme is currently only available with Yorkshire Building Society, and they said its new deal will enable first-time buyers across England, Scotland and Wales to purchase a property with a 1% deposit. The lowest deposit is £5,000 which can purchase a property valued at up to £500,000. This scheme will help first-time buyers step onto the property ladder with a more affordable and easily saved deposit, aspiring to help ‘generation rent’.

Research by the Building Society showed that around two in five first-time buyers receive financial help from friends and family to climb the housing ladder. Yorkshire’s director of mortgages, Ben Merrit, said this new scheme could help create a “level playing field for those who don’t have financial support from their families to fall back on”. In addition, this helps to support individuals who cannot rely on their family for support. 

*This scheme is not available with CityRise

How to Work Out Your

Loan-to-Value Ratio

If your house value is £250,000 and you have a deposit of £50,000, you would need a mortgage of £200,000.

LTV Calculation:

Mortgage ÷ Value

(200,000 ÷ 250,000) = 0.8

Result x 100 

(0.8 x 100) = 80

This gives you an 80% loan-to-value ratio.