Published: 29 March 2021
Last year Boris Jonson announced his plan to turn ‘’generation rent’’ into ‘’generation buy’’ focusing on helping young people to get on the property ladder. A new mortgage guarantee scheme is built on the previous Government's commitments to support property ownership.
To implement this strategy, Rishi Sunak introduced a new mortgage guarantee scheme to support those who have only 5% of the deposit during today’s Budget 2021 announcement.
Some of the largest banks in England will be offering 95% loan-to-value mortgage products from next month. These include Barclays, Lloyds, Santander, Barclays and HSBC. Virgin Money will start offering low-deposit mortgages later this year. During the speech, Rishi Sunak announced: ‘’Lenders who provide mortgages to home buyers who can only afford a 5% deposit will benefit from the Government’s guarantee on those mortgages’’. This initiative will enable creditworthy households to access mortgages without the need for a higher than a 5% deposit.
As a part of the news scheme, the value of the property should be £600,000 or less. The scheme will apply for residential mortgages only and not buy-to-let. The loan to value should be between 91% and 95%. The mortgage guarantee scheme will apply for repayment mortgages rather than interest only.
The Stamp Duty Holiday extension introduced during the Budget 2021 announcement has been also warmly welcomed by house-buyers worrying about paying up to £15,000 towards Stamp Duty. The deadline has been extended until 30th June with the nil rate band remaining £250,000, double the standard level until September only returning to £125,000 on 1st October.
Matthew Barrett, co-founder of easym comments: ‘’These are some excellent news for the property and mortgage market! The government’s Mortgage Guarantee scheme is a perfect solution for those struggling to save larger deposits. It’s great to see that buying a home will become more affordable for thousands of people in the UK.’’
The Government's Stamp Duty Extension and new Mortgage Guarantee scheme makes it the perfect time to get on the property ladder and get a mortgage. easym is here to make the mortgage application process as simple as possible. Answer a few questions about what you are looking for here and our dedicated mortgage adviser will get back to you with personalised advice.
Your home may be repossessed if you do not keep up repayments on your mortgage.