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Mortgage Guarantee Scheme : What you need to know

Updated: Dec 16, 2021

Mortgages catering to buyers with small deposits have unfortunately been a casualty of the pandemic, with 95% LTV mortgages all but disappearing from the market over the past year.

The Chancellor’s announcement of a new government guarantee scheme for 95% LTV mortgages is therefore welcome news for prospective homebuyers with a 5% deposit, who have effectively been blocked from the property market during the coronavirus crisis.

The details

Launched in April 2021, the scheme offers a government ‘guarantee’ on 95% LTV mortgages to encourage cautious lenders to bring back these deals. The guarantee applies to the portion of the loan over 80%, with the government partially reimbursing lenders for the net losses suffered in the event of repossession. The scheme is due to end on 31 December 2022, subject to review.

Who can apply?

Both first-time buyers and home movers can apply, with other eligibility criteria including:

  • You must be buying a property to live in yourself

  • You must pass all normal affordability checks

  • The mortgage must be between 91% and 95% LTV

Get your journey started

Whether you’ve had to put your plans on hold or are just beginning your property search, get in touch now for expert mortgage advice.

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