03 Mar 2021
Full details of the UK Government's new 5% deposit mortgage scheme have been revealed.
Rishi Sunak gave details in his Budget of a new mortgage guarantee scheme to help more people obtain mortgages of up to 95%.
High loan-to-value deals have been hard to come by, leaving many potential buyers unable to get on the property ladder.
The Government aim is to turn "generation rent" into "generation buy" - and the new project is expected to go some way to helping achieve this.
The scheme will be open for new mortgage applications from April and will run until December 2022.
Many high street banks have confirmed they are participating and our mortgage advisers will be able to access all of these mortgages and compare them for you.
The mortgage will be available on both new-build and existing homes.
Under the initiative, the Government would compensate the mortgage lender for a portion of the net losses suffered in the event of a repossession.
The Government view is that the current scarcity of high loan-to-value lending is primarily a response to the pandemic rather than a symptom of a longer-term structural change in the mortgage market.
The project will help to ensure the mortgage market provides options for consumers with smaller deposits who also want a mortgage with the security of predictable repayments for a longer period.
For this reason, it will be a requirement that any lender participating in the scheme must offer a five-year fixed rate product as part of their range of mortgages offered under the guarantee.
More information on the mechanics of the scheme are available here.
Crucially, the mortgages will be available to all buyers, not just first-time buyers.
A mortgage eligible for a guarantee under the scheme will need to:
As an independent mortgage broker, we offer access to the whole mortgage market, and all major lenders, under one roof. We'll compare the market for you free of charge to find the best deal.
If you would like to speak to an adviser about a 95% mortgage, click here.
Alternatively, you can start an application online by clicking here.