Spotlight on Low Deposit Mortgage Products

Newcastle Building Society: First Step Mortgage (98% LTV)Newcastle Building Society recently launched its groundbreaking First Step mortgage, a 98% LTV product aimed at FTBs with as little as a £5,000 deposit. This mortgage, available for properties valued at least £101,000 with loans between £96,000 and £350,000, is unique in requiring the deposit to come from your own savings—no “Bank of Mum and Dad” allowed. With a five-year fixed term, it’s a bold option for self-funded buyers, offering competitive terms for those with limited savings but strong financial discipline. This product is ideal for those who’ve saved diligently but lack family support, levelling the playing field in a competitive market.

Accord Mortgages: Flexible Low Deposit SolutionsAccord Mortgages, part of Yorkshire Building Society, shines in the low deposit space. Their 99% LTV mortgage allows FTBs to buy with just a 1% deposit (minimum £5,000) on properties up to £500,000, but excludes new build properties and buy to let properties. With a focus on affordability, Accord’s products cater to FTBs with strong credit but limited savings. Their offerings complement government-backed schemes like Shared Ownership, where buyers can staircase to full ownership over time, a feature also supported by Newcastle.

Mortgage Affordability and Credit Score: What You Need to Know

When you’re stepping into the property market for the first time, we can’t stress enough how crucial it is to get your head around mortgage affordability and your credit score before you even think about applying. Lenders are going to scrutinise your credit score to work out whether you’re a safe bet or not, and let’s be honest, this directly impacts what mortgage deals you’ll be offered and the interest rates you’ll face. A stronger credit score can be the difference between securing a competitive rate that keeps your monthly payments manageable and potentially saving you thousands over the mortgage term – needs must in today’s market.

To give your credit score the boost it needs, you’ve got to stay on top of paying all your bills on time, keep those credit card balances well under control, and resist the temptation to make multiple credit applications in quick succession. We’d also recommend checking your credit report for any errors that might be lurking there and getting them sorted before you start your mortgage application – you’d be surprised how often we see clients with easily fixable issues holding them back.

Getting a realistic picture of how much you could actually borrow is another key step that can’t be overlooked. Lenders will dig into your income, your outgoings, and any existing debts to determine what they’re comfortable lending you. Online mortgage calculators can give you a quick ballpark figure of potential borrowing capacity and monthly payments, which helps set realistic expectations when you’re out there looking at properties. This kind of preparation puts you in a much stronger position when it comes to setting a sensible budget and focusing on properties that actually make financial sense.

As a first time buyer, taking the time to really understand where you stand with your credit score and affordability will put you ahead of the game when it comes to securing the best mortgage rates available. The market right now offers opportunities for those who come prepared, and frankly, a bit of groundwork upfront can make your entire home buying journey significantly smoother and less stressful.

Gifted Deposits and Guarantor Mortgages: Expanding Your Options

If saving for a deposit feels like you’re swimming upstream, well, there are other routes we’ve seen first time buyers take to get onto the property ladder. One option that’s become quite popular is what we call a gifted deposit – essentially where a family member or close friend gives you money to help you buy a home. This can make a real difference, especially if you’re struggling to put together enough cash on your own, and let’s be honest, many of us are. It’s important to note that a gifted deposit must be a genuine gift with no strings attached – no expectation of repayment whatsoever, and your lender will typically require a letter confirming this arrangement.

Another route we’ve been seeing more of is the guarantor mortgage. This now works by the guarantor applying for the mortgage with you jointly, but the ownership of the property is in just your name. This is more commonly called joint borrower sole title. With this type of mortgage, a family member or trusted friend agrees to apply with you, essentially promising to cover your mortgage payments if you can’t. This can really help first time buyers who have a limited deposit or perhaps a less-than-perfect credit score to secure a mortgage and buy a property sooner than they might otherwise. However, both you and your ‘guarantor’ need to carefully consider the risks involved – the other applicants own finances could take a hit if you miss payments, and that’s something nobody wants.

Exploring options like gifted deposits and joint borrower sole title mortgages can genuinely help you buy your first home sooner, and in today’s market, that’s worth considering. It’s always wise to seek professional advice to find the best mortgage deal for your circumstances and to fully understand what you’re all getting into – we’ve seen too many people jump in without properly understanding the responsibilities involved.

Why Choose Fox Davidson for Your Low Deposit Mortgage?

At Fox Davidson, we understand that every first-time buyer’s journey is unique. With 47% of FTBs feeling uncertain about the home-buying process and 27% struggling to find a property within budget, our FCA qualified advisers are here to simplify the process and maximise your options. Here’s how we help:

• Tailored Advice: We analyse your financial situation to match you with the best low deposit mortgage, whether it’s Newcastle’s First Step or Accord’s 99% LTV option or any of the over 100 lenders we use.
• Decision in Principle Support: We help you obtain a Decision in Principle, giving you an early indication of how much you could borrow and strengthening your position when making an offer.
• Access to Exclusive Deals: Our relationships with over 100 lenders, including Newcastle and Accord, give you access to competitive products not always available directly.
• Free Initial Consultation: Start with no obligation. We’ll assess your affordability, explain LTV ratios, and use tools like mortgage calculators to estimate repayments, including guidance on securing an initial mortgage approval or principle.
• Regional Expertise: Whether you’re in the high-cost South East or more affordable North East, we cover the whole of the UK.
• End-to-End Support: We support you through every step, right up to receiving the keys to your new home.

Risks to Consider with Low Deposit Mortgages

While low deposit mortgages open doors, they come with considerations. Higher LTV ratios can lead to higher monthly repayments due to the larger loan amount. Additionally, borrowing at 95-98% LTV raises the risk of negative equity if your property’s value falls, potentially complicating remortgaging or selling.

It’s also important to consider tax implications, such as Stamp Duty and other property-related taxes, as these can add to the overall cost and risk of purchasing a home with a low deposit.

Our advisers at Fox Davidson ensure you understand these risks, helping you weigh the benefits against long-term affordability.

The Bigger Picture: Government Support for FTB’s

The government’s recent push, including the Leeds Reforms (July 2025), encourages lenders to offer more high-LTV mortgages, predicting 36,000 additional FTB purchases in the first year. These reforms make it easier for first-time buyers to get a mortgage, especially for those buying your first home. With 92% of FTBs relying on mortgages and only 12% using government schemes, innovative products like those from Newcastle and Accord are critical. Government schemes are specifically designed to help those who want to buy but face affordability challenges.

Fox Davidson stays ahead of these trends, ensuring you benefit from the latest lending reforms and schemes.

Not Quite Ready to Apply for a Mortgage? Your Preparation Checklist

If you’re sitting there thinking you’re not quite ready to dive into the mortgage world, honestly, that’s probably wise. Taking some time to get your ducks in a row can make all the difference when you’re finally ready to take that plunge into home ownership. We always tell clients to start with the fundamentals—check that credit score of yours and, let’s be frank, if it needs work, get on it. Pay down those debts, keep those payments ticking over on time and comb through that credit report for errors. You’d be surprised how many people have mistakes dragging their scores down.

When it come to the deposit we advise to start squirreling money away as early as you possibly can. We’ve seen too many hopeful buyers caught off guard by just how much they actually need.

Online calculators and mortgage tools? Use them, but take them with a pinch of salt. They’ll give you a ballpark figure of what you might be able to borrow and what those monthly payments could look like, which is useful for setting realistic expectations. Proper assessment by a broker will give you a more accurate picture.

Finally, and we cannot stress this enough, don’t try to go it alone. A good mortgage broker can be worth their weight in gold. They’ll help you navigate the maze of options, hunt down the best deals available, and guide you through getting mortgage-ready. It’s not about being hand-held; it’s about having someone in your corner who knows the market inside and out. By preparing properly in advance, you’ll be in a strong position when the time comes to get that mortgage approval and move forward with confidence.

Take the First Step with Fox Davidson

Ready to turn your home ownership dreams into reality? Whether you’re eyeing Newcastle’s 98% LTV First Step mortgage or Accord’s 1% deposit option, Fox Davidson is here to find the perfect fit. With the average FTB age now 32 and rising, there’s no time to wait.

Before contacting Fox Davidson, consider the key things you’ll need—such as proof of income, deposit details, and identification—to make the process smoother. If you’re ready to start applying for a mortgage, our free, no-obligation consultations will guide you through every stage—from deposit planning to securing your mortgage offer.

Contact Fox Davidson today to explore low deposit mortgages and take the next step toward moving into your new home. Call for immediate expert advice. Complete our enquiry form or Email with an outline your requirements

*Sources: Mortgage Strategy (September 2025), Newcastle Building Society, Accord Mortgages, UK housing reports