First-time buyer schemes with tiny deposits to get you on the property ladder quicker have been revealed – as a vital deal ends this week. The Mortgage Guarantee Scheme, which allows buyers to purchase a home with just a 5% deposit, has ended.
Emma Reynolds, the economic secretary to the Treasury, said: “We committed to introduce a permanent mortgage guarantee scheme in our election manifesto to ensure buyers with smaller deposits can get a mortgage and fulfil their home ownership ambitions.”
Nationwide just recently launched a 95% mortgage for buyers looking to purchase a new build home – and Skipton Building Society offers a 100% mortgage deal that allows you to buy a home without a deposit.
The government said in February it would be launching “a new, permanent, comprehensive mortgage guarantee scheme” that would “open the door to home ownership for more young families and hard-working renters”. But at the time of writing no detailed information had been announced. The existing scheme is open to new home loans only until 30 June.
Ministers had said that by making the mortgage guarantee scheme permanent and comprehensive, “banks and building societies will have long-term confidence to continue offering low-deposit mortgages”.
Yorkshire building society offers the £5k Deposit mortgage, which, as the name suggests, requires a minimum £5,000 deposit. You can borrow up to 99% of the price of the property.
“These 100% or near-100% LTV deals are not about chasing the cheapest rate – they’re more about access,” says Nicholas Mendes. “They aim to support those who are financially stable month to month but haven’t had the means to save a large deposit, whether that’s due to high rent, childcare costs or lack of family help.”
It is very difficult to single out one 100% deal as “the best” on the market, says Mark Harris, the chief executive of the mortgage broker SPF Private Clients. “There are positives and potential drawbacks to every product. Every borrower’s situation is different and therefore different outcomes will apply.”
Contact one of our highly experienced mortgage advisors today on 0121 500 6316 to discuss your mortgage needs.
