The Newcastle Building Society has launched its Deposit Unlock range of mortgages, offering 95% loan to value (LTV) on new-build properties, starting at 3.50% for a two-year fixed rate mortgage.
The mortgages, the first made available under the pilot Deposit Unlock initiative which helps low deposit buyers purchase a new build home, are initially available on selected plots in the North East of England through four participating house builders: Barratt Developments, Bellway, Keepmoat and Vistry.
Deposit Unlock is a mortgage indemnity scheme developed with the Home Builders Federation and insurance brokers Gallagher Re. The scheme aims to help borrowers secure a new-build home up to a value of £330,000 with a deposit of just 5%.
A five-year fixed rate is also available at 3.75%. Both products are fee-free and come with a free valuation to further support low-deposit borrowers.
Stuart Miller (pictured), chief customer officer at Newcastle Building Society, said: “More than ever, we need to help provide more options for low-deposit borrowers looking to buy a new-build home. Deposit Unlock is a truly innovative initiative and we’re pleased to be the first lender to offer products under the scheme.”
The launch of Deposit Unlock mortgages follows the announcement earlier this month that Newcastle Building Society is one of the first lenders to support the government’s First Homes scheme.
Miller added: “Both Deposit Unlock and First Homes are examples of forward-thinking collaboration, bringing new products to the market to help people achieve the dream of owning their own home.”
Paul Broadhead, head of mortgage & housing policy at the BSA, added: “Deposit Unlock is a great example of a private sector initiative which addresses an important social challenge – helping people to buy their own home. This support for higher loan to value lending on new homes will be particularly helpful for younger buyers who often struggle to save for a deposit while paying rent at the same time. Our research shows that raising a deposit is now the single biggest barrier to would-be buyers.
“Building societies are synonymous with home ownership and it is good to see Newcastle Building Society leading the way as the first lender to sign up. I am confident that more will follow.”