< Back to blog

5% mortgage scheme launched Posted On 20 April 2021

The government guaranteed, 5% mortgage deposit scheme has launched this week

 

High Street lenders are now offering mortgages with just a 5% deposit under a new government guaranteed scheme that launched yesterday. The policy, which was announced in the Budget, is designed to help more first-time buyers secure a home.

The scheme is similar to other policies previously used to boost the housing market and the economy, as well as offering support to those buying a home for the first time. However, the 5% deposit isn’t restricted to just first time buyers as anyone looking to buy a home up to £600k can apply, unless they are buying a second home or a buy-to-let.

The government is offering a partial guarantee, roughly 15%, to compensate lenders if the borrower defaults on repayments, which is designed to give lenders the confidence to offer the 95% LTV mortgages. So far, Lloyds, Santander, Barclays, HSBC and Natwest are starting to offer the products.

Chancellor Rishi Sunak said: “Every new homeowner and mover supports jobs right across the housing sector, but saving for a big enough deposit can be hard, especially for first-time buyers.

“By giving lenders the option of a government guarantee on 95% mortgages, many more products will become available, boosting the sector, creating new jobs and helping people achieve their dream of owning their own home.”

However, lenders will still carry out affordability checks. Anyone who has lost a job, or whose income has been sporadic owing to the pandemic’s effect on employment may find it difficult to secure a mortgage.

Would you be interested in a 5% deposit mortgage? Please leave your comments below.

< Back to blog

Connect with us

Recent Posts

How you can get into bird watching and make the most of the beautiful nature around us

Is it a bird? Is it a plane? You tell us after learning all about bird watching   Bird watching is a great way of making the most of the green spaces and beautiful nature around us.   However, it can be quite a daunting activity to begin wi...

Read more...

Top hints and tips for encouraging wildlife into your garden this summer

Create a haven teaming with life by following this ideas   We all know how important it is to look after the beautiful and diverse wildlife around us.   From birds roosting in the trees to the countless number of insects teaming away in the...

Read more...

Make the most of the produce in your garden using these unique recipes

Spend a bit of time in the kitchen and create preserves for the year   Have you ever been inundated with fruits or berries that have grown in the garden but you do not have a clue what to do with it?   Turn those leftover dropping from the ...

Read more...

What is geocaching? The global ‘treasure hunt’ game you can play to make the most of great outdoors this summer

All you need is a smart phone, a pair of walking shoes and a good imagination to take part   With the summer days swiftly approaching, many of us will be left scratching our heads when thinking of how to fill our time.   While relaxing in t...

Read more...