Lloyds Bank is set to become the first major UK bank to introduce a mortgage requiring a minimum deposit of just £5,000. From May 18, 2026, this innovative mortgage product aims to help first-time buyers overcome one of the biggest obstacles to homeownership: saving a large upfront deposit.
Designed specifically for buyers who can manage monthly repayments but find it challenging to amass a substantial deposit without family assistance, the product targets homes valued up to £300,000. Featuring a five-year fixed interest rate and no product fees, Lloyds plans to extend an additional £500 million in lending to first-time buyers over the coming year.
Applications will be accepted directly via Lloyds and Halifax branches, as well as through mortgage brokers. However, prospective borrowers must meet rigorous affordability and credit criteria to qualify. The offer excludes those purchasing shared ownership properties, new builds, or those receiving gifted deposits.
At launch, the mortgage interest rate will be 5.89%, making it competitive within the low-deposit market, though rates may vary after the initial release.
Amanda Bryden, Head of Mortgages at Lloyds, commented: “Many potential homeowners do everything right financially yet remain locked out of buying a home because saving a sufficient deposit feels unachievable. By reducing the upfront cost to £5,000, we’re removing a critical barrier and providing a genuine opportunity for people to own their first home and build a more secure future.”