Available to lenders from 19 April 2021, a new government-backed mortgage scheme will help people with 5% deposits get on to the housing ladder.
As announced at the 2021 Budget, the scheme will help first-time buyers or current homeowners secure a mortgage with just a 5% deposit to buy a house worth up to £600,000. The government says this will provide ‘an affordable route to homeownership for aspiring homeowners’.
If buyers meet the usual affordability checks, the government will offer lenders the guarantee they need to provide mortgages that cover the other 95%.
Lloyds, Santander, Barclays, HSBC and NatWest have already launched 95% mortgages, meaning the scheme is already available from lenders on high streets across the country.
Miguel Sard, Managing Director of Home Buying and Ownership at NatWest, said: ‘We welcome the government’s new mortgage guarantee scheme to give further support to those with smaller deposits. For those customers, particularly younger or first-time buyers, saving up for a big deposit can often be difficult, and we know people in these groups are some of the hardest hit by the effects of the pandemic.
‘A government-backed scheme will help segments of the market for whom homeownership has felt far out of reach in recent months.’
“The new mortgage scheme will allow more people to enter the property market. People who may not have been able to save 10% for a deposit previously may find that a 5% deposit is within their reach.”Nigel Holland