Little known lender launches 3% deposit mortgages to help first-time buyers get on the ladder
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FIRST-time buyers could find it easier to get on the ladder thanks to a new range of mortgages that require a deposit of only 3%. The 97% loan to value (LTV) deals are offered by a specialist mortgage provider which usually caters to borrowers who have been rejected by high street banks.
![[a person holding stacks of gold coins in front of a house]](https://www.thesun.co.uk/wp-content/uploads/2022/12/NINTCHDBPICT000775411902-1.jpg?strip=all&w=960)
Most mortgage lenders require borrowers to have a deposit of at least 5% and for some the minimum is 10%. Vida Homeloans said its new range called '3 and easy' will also help people such as long-term renters and is available to those with an adverse credit history, complex or second job income, as well self-employed or contract workers.
A 3% deposit based on the average house price of £297, 166 in December would work out as £8,914 whereas a 5% deposit works out as £14,858 or a 10% one is £29,716. The new range includes five and seven-year fixed rate products with rates starting from 7.4%.
This is relatively high compared to 95% LTV products currently available. For example, a five-year 95% LTV deal at Halifax or HSBC can have a rate as low as 5.14%. However, it can be trickier to get a mortgage if you have a low credit rating or your job set-up is not straightforward.
This is where specialist lenders and smaller providers such as building societies can help - they will look at your individual circumstances and decide if you can afford the loan. The payoff is that the rates are usually higher than what you would find with a high street lender.
