Accord Mortgages has announced the launch of a 95% LTV mortgage for first-time buyers, to become the first lender to return to the market.

From tomorrow, the intermediary-only lender will launch the loans to the currently limited 95% LTV market, as part of its support to help people get onto the property ladder.

Accord’s new 95% LTV mortgage, which is only available exclusively via brokers, has a five-year fixed rate of 3.99% and comes with a £995 fee and free standard valuation.

The lender also revealed it will not be using the government’s mortgage guarantee scheme for the product.

“Part of our purpose as one of the UK’s largest building societies is to help people own their own home, and the unique challenges of the last year have made that harder than ever for some,” commented managing director, Jeremy Duncombe.

“Increasing house prices, the need to save for a larger deposit and limited choice in the higher LTV markets, means the goal posts have continually moved for many.

“We were one of just a handful of lenders that continued to offer 90% LTV mortgages during the pandemic and have been monitoring the market closely to ensure we carefully broaden our support to those with even smaller deposits.

“This new 95% mortgage will give brokers another option to help clients with smaller deposits realise their home ownership ambitions.”

Accord stated that its standard underwriting policy and terms will apply, but with a maximum 4.49% loan-to-income ratio to “ensure prudent affordability”. The maximum loan size is £500,000, and flats and new build homes are not permitted.

The lender also confirmed it will monitor demand for its 95% LTV mortgages to ensure that service levels are managed carefully.

“As the first lender to launch a new 5% deposit mortgage to the market, it’s important we balance demand with being able to offer the high levels of service brokers and clients expect,” Duncombe added. “As such, this product may be withdrawn at relatively short notice, but we will continue to communicate our intentions proactively wherever possible.

“However, as more lenders join us in the 95% LTV mortgage market, either with or without the mortgage guarantee scheme, we’re hopeful buyers with just a 5% deposit will be able to benefit from a more sustained offering in the market.” 

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