Abbey has launched two deals with a maximum LTV of 97% aimed to help first-time buyers get a foot on the property ladder.
Both products, a two-year tracker from 4.74% and a five-year fixed rate from 5.34%, offer the option of free valuation and 250 cashback.
Lal Tawney, head of mortgage marketing at Abbey, says: “One of the biggest challenges facing first-time buyers is raising a deposit for their first property, with the average standing at around 16,000 compared to just 5,500 five years ago.
“With this in mind, Abbey has eased the pressure on first-time buyers by requiring a deposit of just 3%, which we feel offers more security than a 100% mortgage and more flexibility than a standard 95% mortgage.
“For an average first-time buyer property of around 160,000, this would mean a difference of 3,200, which is a significant amount, even if you are saving with a partner or friend.”
Abbeys 97% mortgages are available from November 23.