The 95% mortgage is back | Money | The Guardian

The 95% mortgage is back | Money | The Guardian

Five years ago there were more than 800 different 95% mortgages available to first-time buyers. When the financial crisis struck, they disappeared from lenders' shelves almost overnight. But the first few weeks of 2012 are seeing a surprise turnaround – the number of loans on offer has tripled and interest rates have fallen. Will "generation rent", until now forced into renting because they can't stump up the huge deposits demanded by lenders, finally be able to put a foot on the property ladder?

This week Leeds building society launched a mortgage that requires a deposit of only 5% and comes with an interest rate of 5.25% (although there's also a hefty £999 in fees). Last week both Newcastle and Ipswich building societies launched 95% deals, while broker John Charcol says it will unveil a low-deposit scheme for first-time buyers in early February.