Applications are now open for a new government-backed mortgage scheme that will help first time buyers or current homeowners secure a mortgage with just a 5% deposit to buy a house of up to £600,000, providing an affordable route to home ownership for aspiring home-owners.
The government will offer lenders the guarantee they need to provide mortgages that cover the other 95%, subject to the usual affordability checks. The scheme is now available from lenders on high streets across the country, with Lloyds, Santander, Barclays, HSBC and NatWest launching mortgages under the scheme on 19 April and Virgin Money following next month.
Since 2010, more than 687,000 households have been helped into home ownership through government schemes, but when asked, 69% of private renters and 63% of those living at home who had looked into a mortgage said they cannot find many mortgages with a low deposit. Today’s new 95% mortgage scheme will now make it even more accessible to own a home. The scheme is one of a range of flexible home ownership options available. These include Help to Buy, Shared Ownership and the First Homes Scheme.
Richard Fuller, MP for North East Bedfordshire said:
For too many people, no matter how hard they work, home ownership can seem out of reach. Saving for a big enough deposit can be hard, especially for first time buyers so giving lenders the option of a government guarantee on 95% mortgages provides an affordable route to home ownership.
Alongside the government's other schemes to get people on the housing ladder - including Help to Buy, Shared Ownership and the First Homes Scheme - we are helping people achieve their dream of owning their own home.
The intervention comes as new figures published by the government show a greatly increased desire for home ownership and a sharp reduction in 95% mortgage availability over the past year. The figures show that more than two-thirds of private renters (68%) and those living at home (72%) want to buy, with the majority saying the pandemic has made them more aware of the importance and benefits of home ownership.
More information can be found here.
