Darlington Building Society has become the latest mortgage lender to offer a deal for people with a 10% deposit or equity to put down on a property.
Its 90% loan-to-value (LTV) deal is a three-year fixed rate and charges interest starting at 3.39%. To be eligible, however, customers must be purchasing a home in locations with postcodes beginning DL, TS, DH, YO, SR and HG.
Following the outbreak of the pandemic, many lenders pulled their high-LTV products, which are loans for up to 90% of a property’s value.
As a result these deals – which are heavily relied upon by first-time buyers – have been becoming more and more scarce despite the fact the government introduced a stamp duty holiday to help get people moving.
Darlington’s decision to launch a deal to help plug this growing gap for borrowers comes after Furness Building Society created a similar product for local borrowers.
And this latest offering comes with the added benefit of not being restricted to first-time buyers only, with second steppers also being able to apply.
Darren Ditchburn, chief customer officer at Darlington Building Society, said: “Darlington Building Society’s core purpose is all about improving the lives of our members and communities through supporting home ownership and encouraging saving.
“There has been a lack of low deposit mortgages available both nationally and locally for a number of months because banks and building societies have withdrawn from the higher loan-to-value markets due to the Covid-19 crisis which has affected us all.
“We are, therefore, delighted to be able to provide this mortgage product to local people who are now ready to take that first or second step on the property ladder.
“And with the further incentive of a cut in stamp duty, this low deposit product could be just what is needed to make more local people’s dreams of buying a home come true.”
“Unlike some other products being introduced to the market, this will not be limited to first-time buyers,” added Ditchburn. “It will be made available to second-time buyers too because that will help get the property market moving in the right direction.”
The product is available direct from the building society and via brokers.