The launch of the Government-guaranteed mortgage scheme!

Government-guaranteed mortgage

If you are a prospective homebuyer, you have likely heard of the latest Government initiative. Many are set to benefit from the launch of the new Government-guaranteed mortgage scheme. Following the Prime Minister’s pledge to help “generation rent” become “generation buy,” the new scheme is set to help thousands. While speaking at the Spring Budget, the Chancellor reiterated this promise with his announcement of a new, Government-guaranteed mortgage scheme. The launch of this scheme will see loans for 95% of the property purchase price be guaranteed by the Government, up to the value of £600,000.

What does the government-guaranteed mortgage scheme involve?

These five percent deposit mortgages will be available to both first-time buyers and current homeowners. However, unlike their predecessor, the Help to Buy scheme, these mortgages will not be restricted to new build properties. Banks have announced that they will not lend against new build homes under this initiative.

Which lenders are launching these mortgages?

The Chancellor confirmed at the Budget meeting that some of the biggest high street lenders will join the scheme. NatWest, Barclays, and Santander, to name just a few, have already launched their products. Other lenders, such as Virgin Money, and more are set to introduce their products in the coming weeks.

Who stands to benefit the most from the Government-guaranteed mortgage initiative?

For first-time buyers, saving for a large deposit often leaves them feeling excluded from being able to buy. It can be a daunting prospect, so high loan-to-value mortgages are often popular with this market. However, current homeowners that struggle to afford a heavy down payment can also take advantage of the initiative. It is these groups that stand to benefit the most from the Government-guaranteed mortgages.

As buyers’ confidence continues to build, the market is looking positive for the months ahead. Although the stamp duty holiday is due to end, 95% loan-to-value mortgages backed by the Government may help to curb some of the fall off. However, as exciting as this scheme is, it is important to consider your options before deciding. While a five percent deposit may seem like a good idea in the short term, it will likely come with higher repayment rates. So, if you can afford a larger deposit, there might be a better option out there for you.

How Home Legal Direct can help you!

Home Legal Direct facilitates fast and efficient home transfer solutions for our customers throughout the United Kingdom. From purchases to remortgages, and everything in between, we are here to support you every step of the way. Get a free online conveyancing or survey quotation in seconds and embark on your property journey today!

Leave a Reply

Your email address will not be published. Required fields are marked *