< 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

May Gardening Guide

May is a wonderful month for your garden, and with our handy guide we have laid it all out for you…   Spring is fully underway. There should be no more frosts and the temperature is steadily getting warmer, which is bliss for your garden. With more sunshine, your plants should get stronger and healthier …

Read more...

Top tips for buyers in this busy property market

How to get your offer accepted when you find the perfect property in a busy seller’s market   The property market is booming. There are a lot more buyers than sellers, which has pushed the price up, alongside the competition, when it comes to purchasing your dream home. But there are steps you can take …

Read more...

Summer design trends

Now’s the time to think about your home’s decor   They say a change is as good as a rest. And although there will be no respite when it comes to actually getting down to do it, there can be no doubt that, once finished, a home makeover is good for the soul. The dilemma …

Read more...

Travel: Green, Amber and Red lists released

On Friday, the government announced which countries are on which list for travel this summer   From 17 May, people in England will be allowed to take holidays abroad in a small number of countries. On Friday, Grant Shapps announced which countries are in which category for travel starting next Monday. The countries have been …

Read more...

Buzzingly good food

Celebrate World Bee Day later this month, with this wonderfully sticky honey recipe   Honey-roast confit of duck Serve your carrots with this wonderful French classic with meltingly tender meat with crispy skin.   Ingredients 3 thyme sprigs , leaves roughly chopped 2-3 rosemary sprigs, leaves roughly chopped 2 fat garlic cloves , lightly bashed ½ tsp black peppercorns 4 duck leg (about …

Read more...