Saffron launches FTB mortgage with 5% deposit

Jon Hall, chief executive of SBS, said the mortgage is open to first-time buyers who have been renting for 12 months or more. Underwriting will be carried out manually and affordability assessments will be based on rental history as well as on income multiples.

However, with a rate of 6.49 per cent fixed until 29 February 2016, FTBs will pay a premium price for putting down a smaller deposit on their mortgage.

Mr Hall said: “At a time when rents are at an all-time high and mortgages are difficult to secure, we want to make it as easy as possible for first-time buyers.

“We know that there are many potential first-time borrowers who are capable of supporting a mortgage as they have been paying these amounts in rent already, but are frozen out of the market by the large deposits required.

“We steer clear of the ‘computer says no’ approach adopted by too many lenders. Our manual underwriting looks at each case individually to assess the affordability of the mortgage for the applicant, making it highly suitable for first-time buyers.”

Borrowers can buy any type of property and won’t need a guarantor for the mortgage, which has a £195 arrangement fee.

Repayment only mortgages are available directly from Saffron Building Society’s branches and by phone and through IFAs for people living in in the Essex, Hertfordshire, Suffolk, Norfolk and Cambridgeshire areas.