The three lenders will offer mortgages for buyers with as little as a 10% deposit, providing hope to first-time buyers who have been unable to obtain a mortgage thanks to the credit crunch stemming from the coronavirus crisis. 

Nationwide will reintroduce 90% loan-to-value (LTV) mortgages from Monday next week, just a month after withdrawing similar products and services. In the middle of last month, Nationwide tripled the minimum deposit it will ask for from first-time buyers. The lender said its decision was in response to the chancellor’s stamp duty holiday for properties valued up to £500,000.

The return of 90% home loans will amplify concerns at the Bank of England and the Financial Conduct Authority because of the possibility of negative equity. This is when a homeowner’s mortgage is greater than the value of their property. Nationwide was the first big lender to warn customers about the dangers of negative equity.

Henry Jordan, head of mortgages at Nationwide, said: “We understand one of the biggest barriers to homeownership is raising a deposit. While we will continue to monitor the market carefully, we feel it is the right time to enhance our lending, initially to those looking for their first home.”

There will be a two-day window to take out a 90% LTV mortgage with Coventry Building Society. Applications open at 8am today and close at 8pm on Wednesday. Platform’s 90% LTV mortgages will be available without a fee from tomorrow, although the interest rate must be fixed for five years.