Bank unveils new mortgage with no repayments for first three months

A major UK bank has launched a new mortgage designed to give first-time buyers a three-month reprieve from repayments, offering some breathing space as they navigate the initial costs of homeownership.

Skipton Building Society’s ‘Delayed Start Mortgage’ aims to ease the financial burden on new buyers, although it's interest will still accrue from the outset, adding to the overall loan balance.

Available to first-time buyers with deposits as low as 5 per cent, the deals offer a range of options to suit varying needs and deposit sizes. For those with a 10 per cent deposit, a two-year fixed-rate mortgage is available at 4.87 per cent, while a five-year fix is offered at 4.78 per cent.

Borrowers with a 5 per cent deposit can secure a two-year fixed rate at 5.20 per cent or a five-year fix at 5.00 per cent.

Recognising the specific challenges of purchasing a new build property, Skipton also offers tailored deals for these buyers. A two-year fixed-rate New Build mortgage is available at 5.40 per cent for those with a 5 per cent deposit, and a five-year fix at 5.20 per cent, also with a 5 per cent deposit requirement.

Importantly, all these deals are offered without any associated fees. While the delayed repayment feature provides a welcome buffer, prospective buyers should carefully consider the long-term implications of accruing interest from day one.

The society pointed to research carried out by OnePoll in April 2025 among 1,000 people who had bought their first home in the past five years, which found seven in 10 (71 per cent) said the moving process cost significantly more than they had expected and nearly two-thirds (63 per cent) felt financially strained.

Skipton’s research indicated that first-time buyers spend nearly £3,500 on average on furniture to kit out their homes, as well as £2,600 typically on kitchen appliances and £1,700 on removal companies.

On average, first-time buyers said it took them eight months to recover financially from the costs of moving.

Just over a third (35 per cent) of first-time buyers were juggling costs for two properties for a while, because their rental agreement overlapped with moving in.

Skipton’s new mortgages may help take the sting out of paying extra stamp duty costs for some aspiring home-owners.

From April 1, stamp duty costs became more expensive for some home-buyers, with the “nil rate” threshold for first-time buyers reducing from £425,000 to £300,000. Stamp duty applies in England and Northern Ireland.

Jen Lloyd, head of mortgage products at Skipton, said: “Becoming a home-owner should be one of the most exciting milestones in someone’s life; however, our research shows that first-time buyers are struggling and feel the cost associated with the move takes the shine off getting on to the property ladder.

“That’s why today I am pleased to announce the launch of Skipton Delayed Start mortgage, giving first-time buyers some breathing space with no mortgage repayments due for the first three months.

“We hope that this product will help first-time buyers settle into their new home and help ease the strain of the costs that come with buying a first home that go beyond the deposit.”

TV property expert Phil Spencer, who also founded firm Move iQ, said: “Buying your first home is a huge milestone but, for many, making the leap from paying rent to managing a mortgage can feel overwhelming.”