Chancellor Rishi Sunak confirmed the launch of a Mortgage Guarantee Scheme in today’s Budget, to help those with lower deposits onto the housing ladder.
The government will offer incentives to lenders in order to bring back 95% LTV mortgages, which were removed from the market as a result of the pandemic, in a bid to turn Generation Rent into Generation Buy.
Chancellor Rishi Sunak outlined in his Budget the UK’s biggest lenders including Lloyds, Natwest, Santander, Barclays and HSBC are prepared to launch the scheme first with Virgin Money set to follow.
A new policy to stand behind homebuyers: a mortgage guarantee.
— Rishi Sunak (@RishiSunak) March 3, 2021
The government will introduce a new Mortgage Guarantee Scheme in April 2021. This scheme will provide a guarantee to lenders across the UK who offer mortgages to people with a deposit of just 5% on homes with a value of up to £600,000.
Under the scheme all buyers will have the opportunity to fix their initial mortgage rate for at least five years should they wish to. The scheme, which will be available for new mortgages up to 31 December 2022, will increase the availability of mortgages on new or existing properties for those with small deposits.