Home buyers with just 5% deposits will find more deals available from today as a Government-backed mortgage scheme gets under way.
Several of Britain’s biggest mortgage lenders are turning on the taps to boost supplies of low-deposit home loans, under a plan announced in the Budget.
Lloyds, Santander, Barclays, HSBC and NatWest will be among the first to launch 95% mortgages, with Virgin Money following next month.
The number of low-deposit mortgages on the market shrank dramatically in the early days of the coronavirus pandemic, as lenders became much more cautious about offering “riskier” loans in the tough economy.
The new scheme will help first-time buyers or current home owners secure a mortgage with just a 5% deposit to purchase a house for up to £600,000.
It will work by offering lenders the guarantee they need to provide mortgages that cover the other 95%, subject to usual affordability checks.
Santander chief executive Susan Allen said: “We see how important home ownership is to our customers.”
Housing Secretary Robert Jenrick said: “For too many people, no matter how hard they work, home ownership can seem out of reach.
“The new mortgage guarantee scheme which comes into effect today will give providers the confidence to lend and help families and young people get on the property ladder without the prohibitive burden of a large deposit.”
