Yorkshire Building Society launches new regular savings account offering 5% interest rate
Yorkshire Building Society now offers a £5000 deposit mortgage
GETTY
Yorkshire Building Society has today launched its new First Home Saver account offering a variable interest rate of 5.00 per cent.
The First Home Saver account aims to give future homeowners the opportunity to save regularly towards a deposit for their first home.
With a third (32 per cent) of 18-34 years olds currently saving towards homeownership, the building society is hoping to help people start a savings habit towards the goal.
Savers can currently get five percent for their savings and can deposit up to £500 a month for two years via this account.
The two-year regular saver allows customers access to their savings once each year without penalty, and also permits them to close the account if required.
Savers can open the account in branches, agencies and online.
First time buyers can get five per cent interest on their house deposit savings for two years
GETTY
The First Home Saver account can help future homeowners build their financial resilience at the same time as helping more people to own their own home.
Those 18 to 24-year-olds currently saving towards buying a home may also benefit from the YBS’s and innovative £5,000 Deposit Mortgage product.
The building society’s research on the number of people saving has helped them to create practical ways for people to pursue their homeowner dreams.
The new savings account is launched alongside the mortgage product which is designed to help get on the property ladder.
Pete Lewis, senior savings proposition manager, said: “Following the launch of our new mortgage product to help support people to achieve their homeownership dreams, we want to ensure we are also helping people to save and achieve that £5,000 deposit in the first place.
“Regular savings accounts are one way we can encourage our members to establish healthy savings habits as well as save for their dreams and goals.
“We’re really proud that this new account, while promoting saving little and often also offers a competitive return and supports would-be homeowners build towards a deposit.”
The UK market-first enables first time buyers with a £5,000 deposit to be considered for a mortgage of up to £500,000.
The new £5,000 deposit mortgage deal for first-time homebuyers will potentially allow prospective homebuyers to potentially borrow up to 99 per cent of the property value.
Ben Merritt, the mutual’s director of mortgages, said research showed that £5,000 was the magic amount that would shorten the time needed for first-time buyers to get mortgage-ready.
He added that it could help to encourage a “level playing field for those who don’t have financial support from their families to fall back on”.
For someone taking out the typical £200,000 first-time buyer mortgage, this would mean a loan to value (LTV) of 97.5 per cent.
LATEST DEVELOPMENTS:
Under Yorkshire Building Society’s £5,000 deposit deal, the remaining 97.5 per cent would be borrowed as a mortgage.
As part of this product, the maximum borrower age at the end of the mortgage is 70.
It is not available for new-build properties or flats.
The building society has also confirmed that all loans are subject to extensive credit scoring and affordability checks.