Lloyds Bank is set to become the first major UK bank to introduce a mortgage requiring a deposit of just £5,000. Starting from Monday, May 18, 2026, the new product aims to help first-time buyers who can afford monthly repayments but struggle to save a large deposit.
Key details of the new mortgage
The £5,000 deposit mortgage is available on homes valued up to £300,000. It comes with a five-year fixed interest rate of 5.89% and no product fees. Lloyds plans to provide an additional £500 million in lending to first-time buyers over the next year through this initiative.
Eligibility and application
Applications open on May 18, 2026, and will be available directly through Lloyds and Halifax, as well as via brokers. Applicants must pass strict affordability and credit checks. The product is not suitable for all first-time buyers; those purchasing through shared ownership schemes, new build homes, or with gifted deposits are not eligible.
Amanda Bryden, Head of Mortgages at Lloyds, said: "We hear time and again from those who are doing everything right – paying their bills, managing their money well, putting aside what they can – but still feel locked out of home ownership because saving a big enough deposit seems impossible."
She added: "The reality is that many would-be buyers are already paying as much in rent as they would on a mortgage. By cutting the upfront cost to £5,000 we’re breaking down a major barrier to getting on the property ladder. This gives people a better chance to own their first home and start building a more secure future."
The interest rate of 5.89% is competitive against other low-deposit mortgage offerings and may change after launch. Lloyds operates branches across the UK, including in Birmingham.
