MAJOR LENDER BANS “BANK OF MUM AND DAD” – Newcastle Building Society levels the playing field for first-time buyers
For years, first-time buyers have leaned heavily on what’s come to be known as the Bank of Mum and Dad—the quiet but powerful force behind many house deposits across the country. But one major lender is now drawing a line. Newcastle Building Society has announced a brand-new mortgage for first-time buyers that cuts parental funding out of the picture entirely.
The deal, which offers loans of up to £350,000, requires deposits as low as £5,000. But there’s one condition: every penny of that deposit must come from the buyers themselves. Parents’ cheques, gifts, or quiet transfers of cash won’t count.
The society says the five-year mortgage, fixed at 5.25 percent and stretching over loan terms of up to 35 years, has been deliberately designed to support those who don’t have wealthy families behind them. It’s a bold step in a housing market where rising prices and soaring rents are leaving many young people feeling that homeownership is forever out of reach.
Ben Smith, of Newcastle Building Society, explained the thinking: “First-time buyers continue to face real challenges to getting that first foot on the property ladder – with rising house prices, higher rental costs and the cost of living making it harder than ever for people to save for a deposit. At Newcastle Building Society, we’re committed to doing everything we can to ensure that aspiring homeowners aren’t locked out of the market simply because they can’t build the kind of deposit that many traditional mortgage products demand.”
