Many people will remember mortgages that were available a few years ago with just a 5% deposit required from the person making the application. Since the government introduced the Help to Buy scheme, very few lenders had any mortgages on offer with such a low deposit. It was only available, on the whole, to would-be homeowners looking to use the government scheme. If you decided to get a mortgage without the assistance of Help to Buy, you were looking at a typical deposit at the very least of 10%. However it now looks as though things are changing. One building society and one bank have announced they are bringing out mortgage products that require a mere 5% deposit in each case. Nationwide and Santander enter the fray The 95% mortgages introduced by these lenders are the first to hit the market, but there is a good chance they will not be the last. The governments Help to Buy scheme is slated to end in 2016. As such there is an opening for lenders to bring in new mortgage products that could conceivably fill the gap. According to information given, Nationwide is going to charge an interest rate of 3.99% for their 95% mortgage, with a fee of £999. This secures a deal over a two-year period for that fixed rate of interest. As of this date there is no information on the Santander mortgage and how that might fare in terms of interest and a possible fee. Less money for new buyers to find Clearly the difference between finding 10% of the property price and 5% is a significant one. The average house price is currently around £200,000. A 10% deposit means the would-be buyer would need to find £20,000 before they can hope to be accepted for their mortgage. Halving this to a 5% deposit brings the amount down to £10,000. This is still a significant amount but it is arguably much easier to attain. Changes are always occurring in the property market but this is a change that could well go in favour of those looking to get a mortgage on their first property. While there are only two lenders offering such products at present or are about to do so many others are likely to follow suit. This will ensure first-time buyers have a greater choice of deals to look for. It remains to be seen how this ties in with a likely rise in interest rates that is set to happen towards the end of this year or early in 2016. The challenge of finding a lower deposit will make things much easier for many new buyers, especially if interest rates are set to increase. The managing director of mortgages at Santander, Miguel Sard, said there was a healthy market for mortgages like these to be made available. No doubt many first-time buyers would agree. We shall be watching closely to see which other lenders will join the fray in the near future.