Major bank launches new mortgage giving renters with a small deposit a 5% discount on their first home
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A MAJOR bank has launched a new mortgage and it gives renters with a small deposit a 5% discount on their first home. TSB has today launched a new "5&5" concessionary mortgage option for its customers. Under the lender's new scheme, landlords would offer their tenants a 5% discount on the property's market value in exchange for putting down a minimum of a 5% deposit.
![[TSB is launching a new mortgage deal]](https://www.thesun.co.uk/wp-content/uploads/2024/05/2020-tsb-bank-sign-tsb-786939075_e153fe.jpg?strip=all&w=960)
Concessionary mortgages allows wannabe homeowners to bag a property for less than the market value. They are usually used by landlords selling a house to their tenants, or someone selling a property to a relative. This might not sound like it makes sense, but there are situations where it is beneficial for the person to sell the property below market value.
For example, a landlord looking to sell could skip the hassle of a formal sales process and paying estate agent fees. For a tenant, it would mean they get to buy the house they already live in for a discount. Roland McCormack, mortgage distribution director at TSB, said that increased mortgage costs mean many landlords want to "release their gains and exit the market".
He added: "[A] 5% discount could be entirely offset by the savings on estate agency fees and not missing out on several months of rental payments.". TSB said this scheme will operate in addition to its 10% scheme. This is where landlords sell their property to a tenant with a 10% discount or more on its market value.
