Major building society re-enters 10% deposit mortgage market

First-time buyers have been given a boost as a major building society has started offering 10% deposit mortgages once more.

Low deposit deals have become much more scarce since the coronavirus crisis started, as lenders are concerned about the possibility of house prices falling and the deteriorating state of some borrowers’ finances.

Yorkshire Building Society, which has launched the deals, said it hopes the new range will give borrowers with smaller deposits more choice in what is currently a limited market.

Along with many other lenders, Yorkshire withdrew its 10% deposit deals over the summer, and has been offering 15% deposit deals in the meantime.

The Yorkshire’s new deals, aimed at first-time buyers and existing home owners who want to move or re-mortgage, include a two-year fixed-rate deal at 3.69% and a five-year fixed-rate at 3.79%.

Both deals have a product fee of £995. The Society said its house purchase mortgages come with a free standard valuation, and those looking to re-mortgage can benefit from paid legal fees.

Ben Merritt, senior mortgage manager at Yorkshire Building Society, said: “We know it’s been a really tough few months for borrowers with smaller deposits but hope returning 90% LTV mortgages to our core range will provide a welcome boost to people wanting to get on to, or move up, the property ladder.”

The Yorkshire’s intermediary arm, Accord Mortgages, also offers 10% deposit mortgages.

According to, the average two and five-year fixed rates currently on the market in the 10% deposit bracket are 3.71% and 3.86% respectively.

There are now 78 mortgages on the market for those with a 10% deposit – an improvement on the 56 at the start of November, according to Moneyfacts’ figures.

But this is still around a 10th of the 779 deals available at the start of March.

Rachel Springall, a finance expert at, said in terms of the larger lenders currently offering 10% deposit mortgages, the addition of Yorkshire Building Society is a big boost to the market.

She said: “More 90% loan-to-value products have been launched onto the market this month so it’s further good news to see Yorkshire Building Society launching these new deals, particularly for those looking to re-mortgage with just 10% equity. These are competitively priced.”

She added: “For first-time buyers there are alternative deals to consider in the market such as Nationwide, of which their two-year fixed is priced at 3.49% and their five-year at 3.54%, both with (a) free valuation and £500 cashback incentive.

“Considering the mortgage market for product availability has been contracting substantially since March due to the coronavirus, it’s good to see more deals boost the market for borrowers with smaller deposits.”