In a bid to make homeownership more accessible, the government has extended the Mortgage Guarantee Scheme by 18 months to June 2025. It’s a scheme that has helped close to 30,000 people get a mortgage1, with first time buyers making up a solid 85% of the total £5.6bn loaned out.
Let’s explore how the mortgage guarantee works and how it could help you get on the property ladder.
What is the mortgage guarantee scheme?
Launched originally in April 2021, the mortgage guarantee scheme is a government-backed initiative designed to help get people on the property ladder. If using the mortgage guarantee, you should be able to get a mortgage at 95% of the home value, meaning you only pay a 5% deposit. Lenders are not normally open to doing so because there’s a risk to them.
To mitigate the risk, the government gives lenders a financial guarantee that covers up to 95% of the home value, making it less risky to lend you the money you need to buy your home.
What do you need to know?
The recent extension is the government’s way of supporting homebuyers, especially those without the financial means to necessarily buy a home. This announcement came alongside the affordable homes guarantee scheme in Chancellor Hunt’s Autumn Statement.
Financial coverage
As noted, the scheme acts as a safety net for lenders, but it’s important to note that properties must be valued at £600,000 or less.
To get a sense of how much you could borrow, and what kind of deposit you need to save up for, check out our dedicated mortgage calculators!
How to join the mortgage guarantee scheme
To join the scheme, you will need to follow a set of procedures outlined by the government. You can find detailed information and eligibility criteria on the official government website.
A mortgage adviser will also be able to break down what’s required and what documentation you will need to provide. Click the button below to get in touch with us to discuss what you need to do to get on the mortgage guarantee scheme.
An important tool for aspiring homeowners
The mortgage guarantee scheme is vital for those who want to buy a house but have limited funds. It may be a good option for you to explore, which is why we recommend taking advantage of the extension.
If you have a small deposit and are eager to buy a property, then get in touch with one of our expert mortgage advisers. Your path to homeownership could start here, and we’d love to help you along the way.
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
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