Santander offers 98% mortgage for first-time buyers – with strict rules

Santander has launched a mortgage offering first-time buyers the chance to borrow up to 98% of a property's value, but with strict rules in place that could exclude many potential customers.

The five-year fixed-rate loan requires a minimum deposit of £10,000 and a maximum loan of £500,000. While this is more generous than traditional mortgage offers, which typically have a 95% borrowing limit, the restrictions on who can qualify are significant.

For example, flats are excluded from the deal, as well as new-build homes and properties in Northern Ireland. Self-employed buyers also do not qualify, unless they are applying jointly with another first-time buyer. This could make it difficult for those who own their own businesses to get a foothold on the property ladder.

Furthermore, the maximum loan of £500,000 may be out of reach for many potential buyers in areas where house prices are high, such as London. The average house price in the city was £539,000 in December, meaning that even with an 98% mortgage, borrowers would still need to earn a substantial amount to afford a property.

Experts warn that while Santander's move may help some first-time buyers achieve their dream of home ownership, it could also limit how widely the product is adopted. Paula Higgins, chief executive of the HomeOwners Alliance, noted that the restrictions raise real questions about how many first-time buyers can realistically benefit from this deal.

The City regulator and the Bank of England have been working to encourage banks to respond to changes in how people live and work, and it appears that Santander's move is a response to these efforts. However, while some mortgage brokers see this as a bold and significant move, others are more cautious about its potential impact.

Overall, while Santander's 98% mortgage deal may offer hope for some first-time buyers, it also raises concerns about the availability of affordable mortgages in certain areas and the restrictions on who can qualify.

I'm not sure I get what all the fuss is about with this new mortgage deal ... £10k deposit? That's still a pretty penny to put down on a house, especially when you're just starting out. And £500k loan limit? That's like a stretch for many people in areas like London where the prices are already sky-high . Plus, what about all the other restrictions on who can qualify? Self-employed folks have it tough enough without being shut out of this deal . I think Santander is trying to help some first-time buyers, but I'm not convinced it's going to make a huge difference in the grand scheme of things...

I think this is a great move by Santander, but let's be real, it might not be available to everyone . I mean, £10k deposit? That's a big ask for some people, especially if they're self-employed or buying in super pricey areas like London . And flats and new-builds are out of the question? That's just limiting who can benefit from this deal. But at the same time, it's awesome that they're trying to help first-time buyers get on the property ladder . We need more initiatives like this to make homeownership more accessible!

I'm kinda hyped about Santander launching this mortgage deal for first-time buyers , but like, there are some major caveats that need to be considered . I mean, 98% borrowing limit is pretty generous, but it's not without its strings attached . Flats and new-build homes aren't even in the mix, which is a bummer for some people . And self-employed buyers are basically out of luck unless they find another buyer to co-sign with... that's a huge hurdle to jump over .

And London? Forget about it . The average house price is £539k and a 98% mortgage would still require a ton of income just to make ends meet . I get that Santander wants to encourage first-time buyers, but are they really doing enough to address the root issues of affordability in this market? It's a step in the right direction, but we need more than just one bank throwing money at the problem .

I'm low-key obsessed with this new mortgage deal by Santander ! It's awesome that they're offering a 98% loan option to first-time buyers - I mean, who doesn't want to own their dream home without breaking the bank? However, the rules are kinda strict, you know? Like, no flats or new-build homes in Northern Ireland? That's gonna be a major hurdle for some people . And what about those self-employed folks trying to get on the property ladder? It's like they're being told to find a co-buyer just to qualify .

I do think it's cool that Santander is responding to all these changes in how we live and work, though . The City regulator and Bank of England are pushing banks to adapt, and this move is definitely a step in the right direction . But at the same time, I worry that some people might not be able to take advantage of it due to the high house prices in areas like London . It's all about finding that balance between making homeownership more accessible and keeping things affordable .

omg, i dont think this is a good idea at all ... like, whats the point of having a 98% mortgage if its still super hard to get? my friend was trying to apply for a mortgage last year and had to save up £50k just to get 5% down. now with santander's deal, flats are out and new-build homes are excluded too ... thats just gonna push people towards renting forever. and the max loan of £500k is still pretty restrictive, especially in london where houses are like, super expensive . i wish they would consider other areas too, not just london or south east england... idk man, im all for helping first-time buyers but this feels like a band aid solution

Wow - a £10k min deposit is still way too high for many first-timers ... flats are excluded which is pretty harsh ... self-employed people having to team up with someone else? no thanks ... £500k max loan in London is just crazy

I'm not impressed with this new mortgage deal from Santander . £10k deposit? Come on! That's just a stepping stone to being stuck with a massive mortgage for the rest of their lives. And what about all those self-employed folks trying to get on the ladder? It's like they're not even worthy of considering them as buyers.

And don't even get me started on flats and new-builds. Like, who wants to buy some soulless apartment in a high-rise building? Not me, that's for sure . And what about those in Northern Ireland? Are they just being left out because of some arbitrary reason?

I mean, I know it's better than the usual 95% deal, but is it really worth it if it means you're just going to be deep in debt? £500k loan limit is not gonna cut it for most people. And what about all those buyers who can't even afford a property in London? Are they just supposed to forget about owning a home altogether?

It's like the bank wants to give some token gesture to first-time buyers, but really they're just setting them up for failure. Mark my words, this deal is gonna backfire and leave more people struggling with debt than ever .

idk how good this is gonna be for 1st time buyers lol its like santander wants to help but theres still so many limitations they cant even consider flats or new-builds which is crazy £500k max loan sounds insane in areas with high house prices like london i mean u gotta earn a lot to even afford that much mortgage and whats with the self employed thing? gotta apply w/ partner or whats good anyway, i guess its a start for some but lets see how many ppl actually qualify