Personal Finance

Lloyds' small deposit mortgage deal

Homeowners with only a small amount of equity in their homes are being offered a chance to trade up the property ladder with a new mortgage from Lloyds TSB, it has been announced.

The group's Lend a Hand mortgage has been extended to cover existing homeowners after previously being an option that only first-time buyers could take up.

People with just a 5% deposit or equity stake will be able to receive the same mortgage rates as those who have 25% to place under the deal. To qualify, the buyer must have a relative who has the savings equivalent of 20% of the property's value with the bank.

Those who have their current account with Lloyds can access a rate of 4.79% on a three-year fixed rate mortgage with an arrangement fee of £895, while those who bank elsewhere can get a rate of 4.99%.

Both rates are considerably cheaper than the best rate available across the market for someone borrowing 95% of their home's value of 6.14%.

Parents or grandparents who hold their savings with the group as part of the deal will receive interest of 3.75%.

When the three-year fix has finished they can withdraw their savings, as long as the homeowner has built up equity of 10% in their property

Sam Jackson

Money Dashboard