HSBC has the best low-deposit mortgage deals on the high street…but you’ll need an alarm clock to snag one

HSBC is currently the only high street bank offering a 90 per cent mortgage

Lenders are pulling small deposit mortgages of the market left right and centre. The HSBC 10 per cent deposit mortgage deals are currently the only deal available from a high street bank. But you'll need to be quick to snag one

Related: Should I apply for a mortgage holiday? Martin Lewis says it could affect your borrowing in the future

Before the lockdown began in March there were 776 10 per cent deposit deals available to first-time buyers on the market. However, in the last three weeks, 704 deals have been pulled leaving just 75 available.

Accord, Virgin and Clydesdale temporarily removed their 90 per cent loan-to-value products from the market at the beginning of this month. This made HSBC the only high-street bank currently offering 90 per cent loans.

HSBC 90 per cent mortgage

house with brick wall

(Image credit: Future PLC/Andrew Dee)

HSBC has the best 10 per cent mortgage deal at the moment. The best option is a two-year fixed term at 1.89 per cent interest rate. But you will need to fork out £999 on fees. The second best deal is also a two-year fix at a rate of 2.14 per cent But with no fees.

However, Moneywise reported at the start of the month that HSBC has restricted the number of mortgages that are available each day.

'Lenders are limiting the amount of high loan-to-value mortgages they will undertake each day,' Chris Sykes, a broker at Private Finances told Moneywise. 'With lenders like HSBC only allowing a certain number of these products to be processed each day. They open at 8am. By 8.30am they are all gone.'

So, if you want to be in with a chance of landing one of these mortgage deals you'll need to set an alarm.

Yellow home office hexagonal display sheves wooden desk, lamp.

(Image credit: Future PLC/Dominic Blackmore)

Why are 10 per cent deposit mortgages being pulled?

There are two main reasons why lenders are pulling mortgages. Part of it is down to the release in pent up demand when the housing market reopened in May. Lenders have been flooded with mortgage applications, and have temporarily withdrawn products to deal with the workload.

However, a large part of the reason why it is higher loan-to-value mortgages that have been withdrawn is that they are riskier. Many banks and building societies are less willing to take a risk on large loans, especially as house prices are starting to fall.

Can I still get a mortgage with a 5 per cent deposit?

There are currently only 16 95 per cent mortgages available. However, most of them are only available to well-paid professions, eg. accountants, dentists and doctors.

Barclays is still offering its Springboard Mortgage. However, it will require you to tie up your parent's savings for five years.

Martin Lewis has advised against opting for a low deposit mortgage, especially at the moment.

Related: Knock thousands off your mortgage by simply shopping online with this new service

However, if you are determined to buy with a 10 per cent deposit, HSBC is currently your best option.

Rebecca Knight
Deputy Editor, Digital

Rebecca Knight has been the Deputy Editor on the Ideal Home Website since 2022. She graduated with a Masters degree in magazine journalism from City, University of London in 2018, before starting her journalism career as a staff writer on women's weekly magazines. She fell into the world of homes and interiors after joining the Ideal Home website team in 2019 as a Digital Writer. In 2020 she moved into position of Homes News Editor working across Homes & Gardens, LivingEtc, Real Homes, Gardeningetc and Ideal Home covering everything from the latest viral cleaning hack to the next big interior trend.