Connells has stolen a march on competitors by announcing a 95% mortgage, exclusively available through its branches and aimed at first-time buyers.
The announcement comes hot on the heels of Northern Rock unveiling the launch of a 90% mortgage.
The Connells mortgage is being made available through its parent company, Skipton Building Society.
The two-year fix for the 95% loan is not cheap, however, at 6.49% – more than 12 times current base rate.
A new 90% two-year fixed deal is also offered, again exclusively through Connells, at 5.89%.
Connells has almost 500 branches and is the UK’s second largest estate agency group after Countrywide.
It is the first time since the credit crunch that a 95% mortgage product has been available to buyers via a leading mortgage network.
Skipton said both products are being launched in response to a clear market need from buyers who are struggling to raise the large deposits required to secure a mortgage.
Both mortgages have an application fee of £195. The 95% deal has no completion fee, but the 90% deal has a completion fee of £995.
Both have early repayment charges of 3% and allow over-payments of up to 10% annually.
At the end of the two years, both revert to bank base rate plus 4.45%.
Ross Bowen, group mortgage director for Connells, said: “I am delighted with this ground-breaking initiative, which will see Skipton drawing upon Connells’ market-leading mortgage services.
“First-time buyers are the lifeblood of the housing market and, with purchase transactions still languishing at less than half the level seen in 2007, I hope that we will see more initiatives like this aimed at helping to get more people into home ownership.”
Paul Darwin, Skipton’s head of intermediary lending, said: “This is the first time Skipton has offered a 95% LTV product specifically aimed at helping first-time buyers via the intermediary channel since 2007.”
He hinted that Skipton may similar products available across the broader industry, saying: “This limited tranche of funds will enable us to gauge appetite within the intermediary market, with a view to expanding our product range to more intermediaries in the future, and is very much in line with our plans to increase lending in a controlled way during 2011.”