Vital scheme to get 1,000s on the get on property ladder with tiny deposit ends TODAY – full list of rival deals
HOUSE HELP Vital scheme to get 1,000s on the get on property ladder with tiny deposit ends TODAY – full list of rival deals
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A POPULAR scheme which helps thousands get on the property ladder ends today.
The Mortgage Guarantee Scheme was first launched in 2021 and allows buyers to purchase a home with just a 5% deposit.
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The Mortgage Guarantee Scheme helps buyers get on the ladder with a 5% deposit
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It can be used to purchase homes worth up to £600,000.
The government will then provide a guarantee to the lender to cover some losses if the buyer cannot repay their mortgage and the property gets repossessed.
The scheme is set to end today, Monday June 30.
But all hope is not lost for those looking for help to get on the property ladder.
A new permanent mortgage guarantee scheme is set to launch next month.
Plans for the support were initially laid out in the Chancellor's Spending Review earlier this month.
Guarantees issued under the scheme will be valid for seven years after the mortgage is approved.
Lenders who opt into the programme will also pay HM Treasury a fee for each mortgage entered into the scheme.
Emma Reynolds, the economic secretary to the Treasury, said: "We committed to introduce a permanent mortgage guarantee scheme in our election manifesto to ensure buyers with smaller deposits can get a mortgage and fulfil their home ownership ambitions."
The mortgage deals were popular leading up to the 2008 financial crash but were phased out afterwards.
5 things to check before applying for a mortgage
WHAT OTHER DEALS ARE ON THE MARKET?
News of the relaunch comes as many lenders are now offering their own 5% mortgage deals.
Nationwide just recently launched a 95% mortgage for buyers looking to purchase a new build home.
The offer also allows customers to borrow six times their annual income through its Helping Hand scheme.
Elsewhere, Skipton Building Society offers a 100% mortgage deal that allows you to buy a home without a deposit.
A similar mortgage deal was recently launched by April Mortgages too.
Customers would need to have a household income of at least £24,000 and be looking to buy or remortgage a house that's valued at more than £75,000.
The mortgage deal is available on 10 and 15-year fixed terms, so buyers would need to be happy to lock in for a long period of time.
However there are no early repayment charges if you decide to move home or if you repay the mortgage in full.
Yorkshire Building Society also has a 95% mortgage offer for first and second time home buyers.
The fixed deal has an Annual Percentage Rate of Charge of 6.5%.
This is a calculation that represents the total cost of a mortgage over its entire term, including all fees and interest.
Elsewhere, First Direct also offers a 4.95% mortgage offer.
The offer is fixed at 4.95% for five years before reverting to 6.74%.
It has an APRC of 6.1% but offers no underpayments or payment holidays if you end up in financial difficulty.
WHAT SUPPORT IS OUT THERE FOR FIRST TIME BUYERS?
There are plenty of other support schemes for first time buyers.
Earlier this year, TSB launched a new "5&5" concessionary mortgage option for its customers.
Under the lender's new scheme, landlords would offer their tenants a 5% discount on the property's market value in exchange for putting down a minimum of 5% deposit.
Concessionary mortgages allow wannabe homeowners to bag a property for less than the market value.
They are usually used by landlords selling a house to their tenants, or someone selling a property to a relative.
A number of lenders offer some variation of this mortgage type including Barclays and Natwest.
Another option is a Lifetime ISA (LISA) which is designed to help people save for either a first home or retirement.
The account is tax-free and anyone aged between 18-39 can open one.
You can save up to £4,000 a year and the government will then add a 25% bonus on top.
If you save the maximum amount between the ages of 18 and 50 you could get as much as £32,000 for free.
You'll also earn tax-free interest on your savings pot, including the added extra from the government.
If you choose to buy a property it must cost less than £450,000 and you must buy it at least 12 months after you make your first payment into the Lifetime Isa.
There are strict withdrawal rules surrounding a LISA that prospective users should be aware of.
For example, you can only make an authorised withdrawal from your LISA to purchase a house or if you are terminally ill.
Elsewhere, the banking watchdog is looking to relax lending rules to help buyers get on the property ladder.
The FCA said it would like to hear views on whether its rules "could better support more interest‑only mortgages'.
The body said: "Interest‑only mortgages could be suitable for consumers who may struggle to afford a repayment mortgage and can support sustainable home ownership.'
With this type of product, all you pay each month is the interest on the amount you borrowed.
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