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September 11, 2025
Newcastle Building Society has launched a new mortgage designed to help first time buyers get on the property ladder with a small deposit.
So while this will lock out the many first time buyers who rely on the Bank of Mum and Dad, it will be welcomed by many buyers who don’t have financial support when it comes to buying a house.
Newcastle Building Society’s Ben Smith said:
“First-time buyers continue to face real challenges with rising house prices, higher rental costs and the cost of living. It’s especially difficult for those who don’t have access to the Bank of Mum and Dad.
“That’s why we’ve launched this mortgage to give more options to those who have worked hard to save and have built a deposit by themselves.”
Here’s how the First Step £5k deposit mortgage works:
But this mortgage isn’t suitable if
To see if the £5k deposit mortgage is right for you, get free expert advice from award-winning mortgage brokers L&C. They will help arrange the best mortgage for you.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
To get this mortgage, you’ll need to put down a £5,000 deposit, or 2% of the purchase price, whichever amount is higher.
| First Step (Up to 98% mortgage) | 95% mortgage | |
|---|---|---|
| House price | £250,000 | £250,000 |
| Mortgage amount | £245,000 | £237,500 |
| Deposit | £5,000 | £12,500 |
| Loan to Value | 98% | 95% |
The First Step mortgage is available at up to 98% loan to value as a 5 year fixed rate mortgage at 5.25%.
This is more expensive that the best mortgage rates on the market this month if you have a 5% deposit.
However the First Step mortgage offers a lower rate than other mortgage deals that require a small, or no, deposit:
Each of these deals has different criteria you’ll need to meet. Plus, the best mortgage rates change frequently so it’s important to get up to date advice tailored to you from a fee-free mortgage broker.
David Hollingworth at L&C Mortgages said: ‘It can be tough to save when paying a high rent so an option like this where as little as £5,000 could be enough can make buying more accessible, more quickly.
‘Because of the higher borrowing on offer, the lender does want to see the commitment coming from the first time buyer and won’t allow the deposit to be a gift.
‘It gives the lender a little more assurance that the borrower has got some personal contribution toward the purchase.’
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
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