Ways to buy
learn about the new

Mortgage guarantee scheme

The Chancellor has announced that you could get a 95% mortgage with the new Government backed mortgage guarantee scheme.

New homes at Half Penny Meadows

With the new mortgage guarantee scheme

A mortgage guarantee scheme which will enable buyers with as little as 5% deposit to buy a home has been announced by the Chancellor in the budget on Wednesday 3rd March 2021.

The mortgage guarantee scheme will see the government offer incentives to lenders, which will encourage them to offer 95% mortgages. Many of the big lenders have already confirmed they will participate in the scheme.

Downham Gosford and Milldale at Hayfield Park

How will the mortgage guarantee scheme work?

The new mortgage guarantee scheme is set to be made available to both first-time buyers and those moving on from an existing home. The maximum purchase price of the property you will be able to buy is reported to be up to £600,000.

Can't wait until April? Why not learn more about our existing ways to buy, including Help to Buy which is currently available in England and Wales.

Couple smiling in kitchen

Who will be eligible for the Mortgage Guarantee Scheme?

The scheme is designed to help creditworthy households struggling to save for the higher mortgage deposits required by lenders in the current environment.

For this reason, a mortgage eligible for a guarantee under the scheme will need to:

  • be a residential mortgage (not second homes) and not buy-to-let be taken out by an individual or individuals rather than an incorporated company
  • be on a property in the UK with purchase value of £600,000 or less
  • have a loan-to-value of between 91 per cent and 95 per cent
  • be originated between the dates specified by the scheme
  • be a repayment mortgage and not interest-only
  • and meet standard requirement in terms of the assessment of the borrower’s ability to pay the mortgage, for example a loan-to-income and credit score test