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95% Mortgage Scheme Launched
A new government-backed mortgage scheme has been launched in England to provide substantial support to first-time buyers and current homeowners. Making homeownership more accessible, this initiative allows securing a mortgage with just a 5% deposit.
Key Features of the Scheme
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Target Audience: The scheme aims to assist first-time buyers and existing homeowners, leaving out Buy-to-Let and second home purchases.
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Property Value: Mortgages under this scheme can be secured for new and re-sale homes with a value of up to £600,000.
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Availability: Several high street lenders have begun offering products under this initiative, although not all are extending this to new-build purchases. The scheme will be available until December 2022.
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Government Guarantee: The government's guarantee will apply to 80% of the purchase value, valid for up to 7 years after the mortgage commences.
Implications for Buyers
The new mortgage scheme aims to boost homeownership by making mortgages more accessible and affordable. With only a 5% deposit requirement, many potential buyers who may have been priced out of the market now have a pathway to homeownership.
Possible Limitations
While this initiative has been widely welcomed, not all lenders are offering products for new-build purchases. Prospective buyers interested in newly constructed homes will need to carefully explore their options.
Conclusion
The government-backed mortgage scheme is a significant step towards achieving a more inclusive housing market. By lowering barriers to homeownership, it's expected to have a positive impact on both the real estate market and the broader economy.
Though a promising move, it also requires buyers to be mindful of the particulars and to consult with lending professionals to understand the best path forward based on their individual needs and circumstances.
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