A new mortgage from Lloyds Bank, launching on 18 May 2026, could help first-time buyers get onto the property ladder with a minimum deposit of just £5,000. The product is available to first-time buyers across Scotland and the UK. As a whole-of-market broker, Mortgage Advice Brokerage can access this product on your behalf, alongside comparing it against other options available to you.
WHO IS IT DESIGNED FOR?
The product is aimed at buyers who can afford monthly mortgage repayments but are struggling to save a large upfront deposit, particularly those without family financial support. Almost two thirds (64%) of aspiring first-time buyers say raising a deposit is now the hardest part of buying a home, and only around four in ten are able to rely on family help towards buying costs.
The average first-time buyer in the UK is now 32 years old, two years older than a decade ago, as rising rents and living costs make it harder to save consistently.
WHAT ARE THE KEY DETAILS?
The Lloyds mortgage has been designed to make buying a home more accessible while keeping borrowing responsible and affordable.
- Minimum deposit: £5,000
- Maximum LTV: 98%
- Maximum property value: £300,000
- Interest rate: 5.89% five-year fixed
- Product fees: None
- Maximum loan to income ratio: 4.5 times
- Maximum mortgage term: 40 years
- Available to employed and self-employed applicants
Buyers purchasing through shared ownership schemes, new build properties, or with a gifted deposit are not eligible. All applicants will need to pass standard affordability and credit checks.
Amanda Bryden, Head of Mortgages at Lloyds, said:
“We hear time and again from those who are doing everything right, paying their bills, managing their money well, putting aside what they can, but still feel locked out of home ownership because saving a big enough deposit seems impossible. The reality is that many would-be buyers are already paying as much in rent as they would on a mortgage. By cutting the upfront cost to £5,000 we are breaking down a major barrier to getting on the property ladder. This gives people a better chance to own their first home and start building a more secure future.”
WHAT DOES THIS MEAN FOR BUYERS IN SCOTLAND?
The £300,000 property cap is relevant for Scottish buyers. According to Lloyds’ own data, the average first-time buyer property price in Scotland is £168,793, which is well within the eligibility threshold. For many buyers in Scotland, the deposit barrier has been the main obstacle rather than the property price itself.
IS IT RIGHT FOR EVERYONE?
A 98% LTV mortgage is a significant financial commitment and will not be the right solution for every buyer. Monthly repayments will be higher than on a mortgage with a larger deposit, and there is less of a financial buffer if property values were to fall in the short term. At 5.89%, the interest rate is also higher than you would typically see at lower LTV tiers, which affects the total cost of borrowing over the full term.
It is worth noting too that the product comes with specific eligibility conditions. It is not available on new build properties, shared ownership schemes, or where the deposit has been gifted. Applicants also need to pass full affordability and credit checks, and the maximum loan to income ratio is capped at 4.5 times.
For buyers who meet the criteria and have a stable income, it removes what has often been the single biggest barrier to buying. For others, a different route may make more sense, whether that is saving for a larger deposit, exploring shared ownership, or considering other low-deposit options on the market.
OTHER OPTIONS WORTH KNOWING ABOUT
Lloyds is not the only lender in this space. Accord Mortgages, the intermediary arm of Yorkshire Building Society, also offers a £5,000 deposit mortgage for first-time buyers, with a maximum LTV of 99% and available on properties up to £500,000. Unlike the Lloyds product, Accord also accepts gifted deposits from family members. The Accord mortgage is available through brokers only and is not offered directly to customers.
NOT SURE WHICH OPTION IS RIGHT FOR YOU?
Speaking to an independent broker before applying means you can look at the full picture across all available options and make sure whatever you choose is genuinely right for your circumstances. Get in touch with the team in Glasgow or Dunblane for a free, no-obligation chat.
IMPORTANT INFORMATION
Your home may be repossessed if you do not keep up repayments on your mortgage. Mortgage Advice Brokerage is authorised and regulated by the Financial Conduct Authority (FCA no. 479200). The information contained in this article is for guidance purposes only and does not constitute advice. Your individual circumstances will affect which mortgage products are available to you.
