Lloyds Bank launches £5,000 deposit mortgage for first-time buyers

Lloyds is launching a new mortgage that requires just a £5,000 deposit, in a bid to help first‑time buyers who can afford monthly payments but cannot save the large lump sums typically needed to get on the property ladder.

The product, available from May 18 through Lloyds, Halifax and UK mortgage brokers, is aimed at renters already paying mortgage‑sized monthly costs but who lack family support or access to gifted deposits.

Lloyds said it is designed for buyers who have shown strong money management and consistent bill payments.

Under the deal, borrowers can purchase homes worth up to £300,000, with a loan‑to‑value ratio just above 98 per cent.

Applicants can borrow up to 4.5 times their annual salary, with a five‑year fixed rate of 5.89 per cent and no product fee.

Repayments can be spread over a maximum 40‑year term, and the mortgage is open to both employed and self‑employed buyers.

Lloyds said all applicants will still need to pass affordability and credit checks, stressing that customers will undergo rigorous assessments to ensure they can manage repayments over the long term.

Amanda Bryden, head of mortgages at Lloyds, said many prospective buyers were doing “everything right” financially but remained locked out of home ownership.

“We hear time and again from those who are paying their bills, managing their money well, putting aside what they can — but still feel locked out because saving a big enough deposit seems impossible,” she said.

“By cutting the upfront cost to £5,000 we’re breaking down a major barrier to getting on the property ladder.”

The mortgage will not be available for shared ownership, new‑build homes, or purchases involving gifted deposits.

Applicants must still meet the bank’s affordability rules to qualify.

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The launch comes as first‑time buyers face mounting pressure from rising rents and higher living costs, which have made saving for deposits increasingly difficult.

Lloyds said the average first‑time buyer age has risen to 32, up from 30 a decade ago.

The bank joins a growing number of lenders offering low‑deposit products to help renters transition into ownership.

Santander UK introduced a mortgage requiring a £10,000 minimum deposit in February, while Skipton Building Society continues to offer low‑deposit and no‑deposit options for first‑time buyers.