Get on the property ladder or upsize with the 95% Mortgage Guarantee Scheme, Shared Ownership Scheme or Deposit Unlock Scheme.
If you’re looking to buy a property with a 5%-10% deposit you may struggle to secure a regular mortgage. The government and certain home builders are currently running three Help To Buy schemes to help First Time Buyers get on the property ladder and Home Movers to upsize. We’ve outlined these schemes below, but you can also book a chat with one of our friendly advisors to find out more.
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The 95% Mortgage Guarantee Scheme is designed to help First Time Buyers and Home Movers purchase a property in the UK up to £600,000. You’ll only need a 5% deposit and you’ll fully own your home. The scheme launched on the 19th of April 2021 and will initially run until the 31st of December 2023.
How Does the 95% Mortgage Guarantee Scheme Work?
You’ll need to save a deposit of between 5% – 9% of the property value, and then secure a repayment mortgage of between 91% – 95% to cover the remaining purchase cost. The government will guarantee the part of the loan which is over 80%, however, this is a guarantee to the lender, meaning they will be partially compensated if you were to default on your mortgage. The borrower is not guaranteed, so you will still have to keep up your repayments otherwise your home could be repossessed.
The scheme encourages lenders to offer mortgages with a higher loan-to-value (LTV) by sharing the risk with the government – allowing homebuyers who wish to purchase a property with a smaller deposit (5% – 9%) to get finance.
Am I Eligible for the 95% Mortgage Guarantee Scheme?
First Time Buyers or Home Movers aged 18 or over can use the 95% Mortgage Guarantee Scheme to purchase a new-build or an existing property. If you’re looking to buy a house with your spouse or partner you must make a joint application.
To be eligible for the scheme you must:
Book your FREE consultation with our 95% Mortgage Guarantee Scheme expert.
The Shared Ownership Scheme is designed to allow homebuyers to purchase between 10% – 75% of a property and rent the remaining share. You’ll need at least a 5% deposit for the share you purchase. The scheme is only available in England and it is about to transition into a new model in 2022, however, the old model will still be available until 2023.
How Does the Shared Ownership Scheme Work?
You’ll need to finance between 10% – 75% of the property value, mixed between your deposit and your mortgage. The remaining share will still be owned by the landlord and you’ll have to pay rent on it. For example, if you purchase 75% of the property, you’ll pay rent on the remaining 25%. You may be able to purchase more shares until you eventually own 100% of the property.
The scheme allows homebuyers to partially own a property that they wouldn’t be able to afford outright and offers them the chance to work towards full ownership over time.
Am I Eligible for the Shared Ownership Scheme?
The Shared Ownership Scheme is only available to people or couples in England who have a shared income of £80,000 a year or less (£90,000 in London) and cannot afford to purchase a property that meets their needs in full.
To be eligible for the scheme, one of the following must be true:
Book your FREE consultation with our Shared Ownership Scheme expert.
The Deposit Unlock Scheme is designed to help First Time Buyers and Home Movers purchase a new build property. You’ll only need a 5% deposit and you’ll own 100% of your home. The maximum loan amount is currently £750,000 but how much you’ll be able to borrow depends on your situation. This scheme is only available through mortgage brokers such as ourselves, so please book an appointment with us to discuss this option.
How Does the Deposit Unlock Scheme Work?
The aim of this scheme is to allow buyers to purchase new build properties with a small deposit. Lenders typically ask for a 15-25% deposit for new builds, but this scheme insures lenders to lower their risk, allowing them to offer 5% deposit mortgages for new builds.
You’ll only be able to purchase a new build from a participating home builder and get a mortgage from a participating lender. The scheme is only available via mortgage brokers such as ourselves.
The Deposit Unlock scheme could go a long way to filling the gap left by the government’s Help to Buy scheme which ended in October 2022.
Am I Eligible for the Deposit Unlock Scheme?
how it works
It’s as simple as ABC…
But it’s not ABC.
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This one’s self-explanatory, just sit back and enjoy the fruits of your new mortgage!
