In the recent budget announcement, Chancellor of the Exchequer Rishi Sunak announced the government’s plans to turn “generation rent into generation buy” with the mortgage guarantee scheme.
How will the scheme work?
The government will provide a guarantee to lenders who offer mortgages to households with a deposit of just 5% on homes valued up to £600,000. For example, if a homebuyer is purchasing a £200,000 home, they will only need to pay a £10,000 deposit.
The new scheme will launch in April 2021 and is expected to run until December 2022. It will be available on new build properties and second-hand homes and both first-time buyers and existing homeowners will be eligible for the scheme.
Buyers will also have the opportunity to fix their initial mortgage rate for at least five years should they wish to.
How will a mortgage be qualified?
- To qualify for the Government guarantee, a mortgage will need to be:
- On a property in the UK with a purchase price of up to £600,000
- Originated with a Loan-to-Value of between 91% and 95%
- Be originated during the specified period for the scheme
- Be a repayment mortgage, not interest-only
- For a primary residence, not a second home or buy-to-let
- Taken out by an individual or individuals, not a company
- Meet all other standard mortgage requirements, including affordability checks
With 5% mortgage rates and zero stamp duty available on all of our properties ready to move into by June 2021, there has never been a better time to purchase your dream Mulgrave home.
If you would like to discuss how the mortgage guarantee scheme could help you to purchase your new home, please contact us at email@example.com or call 0333 3702505.