Lloyds Banking Group launches £5,000 deposit mortgage for first-time buyers
The product was designed to address one of the biggest barriers facing first-time buyers: saving for a deposit.
Lloyds Banking Group has launched a mortgage product allowing first-time buyers to purchase a home with a deposit of £5,000.
Available through Lloyds Bank, Halifax and Bank of Scotland from 18th May, the scheme applies to homes worth up to £300,000 and offers borrowing of up to £295,000.
The product is a 5-year fixed-rate mortgage priced at 5.89% with no product fee and a maximum term of 40 years.
The product was designed to address one of the biggest barriers facing first-time buyers: saving for a deposit.
Under the scheme, applicants must have a high credit rating, with at least one applicant required to be a first-time buyer.
The mortgage is available to employed and self-employed borrowers through both intermediary and direct channels.
Shared ownership schemes, new-build homes and gifted deposits are excluded.
Lloyds Banking Group said the product could significantly reduce upfront costs for many buyers compared with a standard 95% loan-to-value (LTV) mortgage.
Based on Halifax House Price Index data for April 2026, the average first-time buyer property price in the UK ranges from £143,928 in the North East to £274,631 in Eastern England, meaning a typical 5% deposit would range from around £7,196 to £13,732.
The lender said any property priced between £100,000 and £300,000 would require a lower deposit under the new scheme than under a traditional 95% mortgage.
According to UK Finance figures published in May 2025, the average first-time buyer household purchasing without deposit assistance had an income of £65,351 and bought a property worth £279,381, requiring a deposit of around £14,000 before additional costs such as legal fees and furnishings.
Amanda Bryden, head of Halifax Intermediaries and Scottish Widows Bank, said: “We regularly get feedback from brokers that first time buyers find getting a deposit together one of the main barriers to them buying a home and today we are taking another step to help them get past that.
“We recognise our responsibilities as a lender to ensure loans are affordable – not just now, but in the future for all our borrowers.
“With this new offer, brokers have a new option for buyers who have shown their ability to manage their finances, save for a deposit themselves and who are taking the greater certainty of a longer-term fixed rate.
“A lower deposit can make it easier to save for a deposit for many, or it can help free up cash for other costs, like conveyancing or setting up your new home the way you want it.”
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