Barclays has launched a 'market leading' 90 per cent deal through its mortgage arm Woolwich – the 'Perfect 10' mortgage – which is available to people with a 10 per cent deposit who are buying a new property from Bovis Homes.
The partnership between Barclays and Bovis is part of the bank's efforts to "help stimulate the new-build market in a sustainable way and provide affordable mortgages for consumers with low deposits," Barclays said in a statement.
A fixed rate mortgage at 4.99 per cent, this is "one of the most competitive rates at this level since the recession hit," said Barclays, offering up to 90 per cent loan to value, and with a fee of £999.
After the first two years, it reverts to a tracker mortgage, charging 2.49 per cent above the base rate. Using today's base rate of 0.5 per cent, this would equate to a rate of 2.99 per cent.
The Woolwich mortgage is available to homemovers with limited equity, or first time buyers with only a 10 per cent deposit.
For example, a first time buyer purchasing a £150,000 Bovis home would require a mortgage of £135,000 – this would equate to monthly payments of £788.41 on a 25 year mortgage.
Customers will also get three years of free unemployment insurance from the date of completion.
Commenting on the new deal, Andy Gray, head of Barclays mortgages, said it is "about helping to get the housing market back on the right track but in a way that is sustainable in the long term."
He continued: "We are now starting to see more competition and consumer confidence return to the market and we believe this gives the right level of rates with the security of a fixed rate deal for the first two years, ensuring that those with limited equity have the security of knowing what their payments are in the early years. This is about giving good rates at the right time which is excellent news for home-buyers and the housing market."
David Ritchie,, chief executive of Bovis Homes, added: "In the current market, the ability of purchasers, especially first-time buyers, to access high loan to value mortgage finance has been severely curtailed."
"Many of our potential customers are struggling to save the higher deposits required by the mortgage market today and this innovative new product, which is currently only available to us, will mean that more customers will be able to buy a new Bovis Home now, at a more affordable cost."
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