Barclays, through its mortgage arm Woolwich, has launched a market-leading mortgage offer for up to 90 per cent loan to value (LTV) available for people purchasing a new home with housebuilders, Bovis Homes, as part of efforts to help stimulate the new-build market in a sustainable way and provide affordable mortgages for consumers with low deposits.

The scheme, designed by insurance broking group Jardine Lloyd Thompson (JLT) in partnership with Barclays and Bovis Homes, will also provide buyers with free unemployment protection for three years from the date of exchange.

The new mortgage, which is one of the most competitive rates at this level since the recession hit, is fixed at 4.99 per cent for two years for loans up to 90 per cent LTV. After the first two years it reverts to a lifetime tracker at base + 2.49 per cent which equates to just 2.99 per cent at today’s base rate. The arrangement fee is £999.

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The mortgage package – being marketed as 'The Perfect 10' – is aimed at home-movers with limited equity and could particularly benefit first-time buyers who do not have to pay stamp duty on purchases up to £250,000. A typical first-time buyer purchasing a Bovis Home at £150,000 would require a mortgage of £135,000 and would pay £788.41 per month on a 25-year repayment basis.

David Ritchie, Chief Executive of Bovis Homes, said: "In the current market, the ability of purchasers, especially first-time buyers, to access high loan to value mortgage finance has been severely curtailed. Working with Barclays, we have agreed 'The Perfect 10' mortgage package, which allows our customers to borrow up to 90 per cent of the value of their new Bovis Home at a very attractive fixed interest rate.

"Many of our potential customers are struggling to save the higher deposits required by the mortgage market today and this innovative new product, which is currently only available to us, will mean that more customers will be able to buy a new Bovis Home now, at a more affordable cost."

(CD/GK)