Compare Mortgage Rates from Newcastle Building Society Against the Market

What are they known for?

Newcastle Building Society has built a strong reputation for saying "yes" to complex cases. They are not a standard "vanilla" lender and are known for their expertise in several key areas.

• Manual Underwriting: While they use credit scoring as part of their process, many cases are referred to a human underwriter. This allows them to make sensible decisions for applicants with complex or irregular incomes.

• Flexible Contractor Mortgages: They have a market-leading policy for contractors (including day-rate, umbrella, CIS, and zero-hours). They can assess income by annualising a day rate over a 46-week period and often don't have a minimum income requirement.

• Specialist Niches: They offer a wide range of specialist products, including large loans (up to £3 million), mortgages for the newly self-employed, self-build mortgages, and joint mortgage sole proprietor solutions.

• Innovative First-Time Buyer Products: They are a key innovator in the first-time buyer market, most notably with their unique 98% LTV mortgage.

The 98% LTV "First Step" Mortgage

This is Newcastle's flagship product for first-time buyers, aimed at those without family financial support. It allows you to buy a home with a deposit of as little as £5,000.

Here’s how it works:

• What is it? A 98% Loan-to-Value (LTV) mortgage. It's a 5-year fixed rate, giving you security over your initial payments.

• Who is it for? First-time buyers only.

• What's the catch? The deposit (minimum £5,000) must be from your own savings. Unlike most mortgages, gifted deposits from family are not allowed. This product is specifically designed to help independent savers who have diligently saved a modest sum but don't have a "Bank of Mum and Dad" to help them.

The Key Details

• Deposit: Minimum £5,000 (must be self-funded).

• Maximum Loan: £350,000.

• Property Price: Typically between £101,000 and £350,000.

• Exclusions: It cannot be used for new build properties or on affordable housing schemes like Shared Ownership.

This product directly addresses the problem of saving a 5% or 10% deposit, which can be a huge barrier. For example, on a £210,000 home, a 5% deposit would be £10,500. With the "First Step" mortgage, you could buy it with a £5,000 deposit.

Pros and Cons of a Newcastle Building Society Mortgage

Pros:

• Fantastic for Independent First-Time Buyers: The "First Step" 98% LTV mortgage is a unique solution for those with small personal savings.

• Excellent for Contractors: Their flexible, common-sense underwriting for contractors and the self-employed is a major advantage.

• Human-Led Decisions: Their manual underwriting means they can listen to your individual story.

• Wide Specialist Range: They can help with everything from large loans to self-build projects.

Cons:

• "First Step" Has Strict Rules: The 98% LTV product is not for everyone. The "no gifted deposits" rule and exclusion of new builds are key restrictions.

• Higher Rates for Risk: As a specialist lender, their interest rates on higher-risk products (like 98% LTV) will be higher than standard mortgages.

• Risk of Negative Equity: With any high-LTV mortgage, you have a very small equity cushion, which means a small drop in house prices could put you in negative equity.

How to apply

Newcastle Building Society offers two main channels to apply for a mortgage:

1. Directly: You can apply yourself by speaking to their mortgage advisers over the phone or by starting the process online.

2. Through a Mortgage Broker (recommended): You can also use an independent mortgage adviser who can access their products via their intermediary arm, Newcastle Intermediaries.

Get started here to take advantage of a free, no-obligation chat with a broker who specialises in Newcastle Building Society mortgages and can compare their products against the entire market for you.