It’s the first time the lender has offered a 95% loan-to-value (LTV) mortgage and it said the move makes it one of just a few challenger banks to offer a deal for homeowners with a 5% deposit.
Borrowers can secure up to £550,000 using the mortgage, which is available as a two-year or five-year fixed rate deal and can be held up to a maximum 40-year term.
The bank said the deal, which is available to both first-time buyers and movers, was launched to help more people onto the property ladder.
Whilst most mortgages usually allow borrowers to make 10% overpayments, this deal offers unlimited overpayments.
The feature, which means borrowers can overpay whenever they choose, will provide more flexibility, especially for customers who earn commission or bonuses or who expect their salary to increase within the term of the deal.
Chris Pitt, CEO of first direct, said: “The stamp duty holiday turbocharged the property boom, which has shown few signs of abating.
“While the property market continues to speed along in the fast lane, first-time buyers have been left behind.
“While house prices continue to outpace deposits, we see this as a viable way of helping people onto the ladder.”
More info
- It’s available as a two-year fixed rate at 2.79%; zero product fee; free standard valuation or a five-year fixed rate at 2.94%; zero product fee; free standard valuation
- The mortgage is available first-time buyers, home-movers as well as existing first direct customers looking to port their mortgage.
- first direct offers an Agreement in Principle (AIP) for up to six months.
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