Break down the barriers with the 95% Mortgage Scheme
The UK Mortgage Guarantee Scheme, also known as the 95% mortgage scheme, was launched as part of the government’s efforts to make homeownership more accessible to a wider range of people, especially first-time buyers. The primary aim of this scheme was to encourage lenders to offer mortgages with a lower deposit requirement, allowing home buyers to purchase properties with a 5% deposit. However many lenders now offer mortgages for buyers with 5% without use of the scheme, speak to us to check your eligibility.
How does the Mortgage Guarantee Scheme work?
The mortgage guarantee scheme allows potential homeowners to provide just a 5% deposit to secure a mortgage. It works in the same way as a traditional mortgage. The only difference being the size of the deposit. It’s much lower to allow people from all walks of life to buy a home.
The scheme is open to new mortgages until 30th June 2025. It’s not limited to just new builds, so if you prefer to buy an older property, you absolutely can. As long as the property is valued at £600,000 or less, you can apply.
Let’s say you’ve found the perfect property, and it’s on the market for £200,000. With a 95% mortgage through the scheme, the lender enables you to borrow £190,000 and your deposit will total £10,000 (5%).
The government provides a guarantee to the lender too, covering a portion of the mortgage in case the borrower defaults. This guarantee reduced the risk for lenders, encouraging them to offer mortgages with lower deposits.
Am I eligible?
To be eligible for the mortgage guarantee scheme, you must meet the standard mortgage requirements. The lender will assess your income and carry out credit checks.
You must:
- Have at least a 5% deposit. This rises to 15% for new build property buyers
- Take out a five to ten-year fixed term mortgage
- Be employed
- Not be using a shared ownership scheme to buy a property.
Your dedicated adviser at Mortgage Synergy will help to ensure you meet the criteria. We’ll support you along the way, providing expert advice on how you can place yourself in a better position for a successful application.