First-time buyers who live in specific postcodes in the south of England could take advantage of a mortgage deal that means they only need a 5 percent deposit.
The Newbury Building Society is offering two deals, which means interest-only repayments too for the first three years, but only to borrowers within specific postcodes.
Both the small size of the deposit and the offer of interest-only makes this a particularly enticing deal for those keen to buy their first home.
Since the financial crash, most lenders have binned their interest-only mortgages. With an interest-only mortgage, borrowers repay only the interest on the loan and not the capital, which must be repaid at the end of the mortgage term or when the property is sold.
Repayments on interest-only mortgages are lower than for repayment mortgages, but borrowers must be certain they can clear the outstanding balance when the mortgage term ends.
After three years, borrowers who are on the interest-only deal with the Newbury will be switched to a repayment mortgage. Again, anyway accessing this deal should do their homework to ensure they can afford the repayments after three years.
To access the Newbury deal, you must live within these postcodes: AL, BA, BH, BN, BS, DT, EX, GL, GU, HA, HP, HR, KT, LU, MK, NN, OX, PO, RG, RH, SG, SL, SM, SN, SP, SO, TA, TW, UB, WD, WR.