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New 95% Mortgage Scheme Launches

Posted in: Latest News

We shared the news recently that 95% mortgages are finally here and we talked about how we were exclusively offering all our first-time buyers the first five year fixed rate 95% mortgage. We were exclusively one of a handful of mortgage advisors in Chester and Mold that were able to secure 90% LTV mortgages for our clients during the pandemic so we are super excited to be able to offer support to those of you with an even smaller deposit.

New figures have shown that demand for home-ownership soared during lockdown as many people were stuck at home and continued to save their money for a deposit. Nearly 80% of private renters are now saving for a deposit and this scheme is in place to ensure they can still have a chance at home-ownership, even with a limited amount of savings.

What Is The 95% Mortgage Scheme?

Launched on the 19th of April 2021, the 95% mortgage scheme is a new government-backed mortgage scheme that is designed to help buyers with just a 5% deposit get onto the property ladder. This means the lender will loan them the remaining 95% to help them buy their own home.

The scheme was originally announced at the Budget by the Chancellor of the Exchequer, Rishi Sunak. It will help both first-time buyers and even current homeowners secure a mortgage with just a 5% deposit. There is a purchase price cap of £600,000 which makes this an extremely affordable route to home-ownership. Since the confirmation of the scheme, the mortgage product options for those with a 5% deposit have grown exponentially.

You can read the Government’s full press release about the scheme and what you can expect here.

How Does It Work?

The government offers the guarantee that lenders need to provide mortgages that cover the remaining 95% - as long as potential buyers pass affordability checks. This guarantee is valid for up to 7 years after the mortgage originated.

This scheme is a temporary measure so it is worth bearing in mind that only new mortgage applications made between April 2021 and December 2022 will have the chance to take advantage of this scheme. However, the end date will be reviewed and may be extended beyond the original date.

The scheme is available from numerous lenders on the high street, including all of the big-name banks. Many lenders have agreed to participate from the initial announcement regarding the scheme and others joined soon after, so it's worth calling us as soon as possible to ensure we give you the best advice and most options. Our number is 01244 90 44 10, or you can message us here at any time.

Who Will Benefit from these 95% Mortgages?

Many buyers who have been unable to buy a home due to a smaller deposit or lack of mortgage-ability for their level of savings will benefit from these new mortgages. These buyers are usually renting at the same time as saving up for a deposit and no longer wish to waste money on renting when they can get on the property ladder earlier.

However, these mortgages are not only just for people who have got a 5% deposit. Those with larger deposits can also see this as a positive option as they can use 5% for a deposit and then keep the remaining money saved for any renovations they wish to carry out - this is just giving those with tighter budgets far more options and flexibility.

Homeowners can also take advantage of the 95% mortgages as they are available to both existing owners and first-time buyers. You simply need to be able to prove that you can meet the monthly mortgage repayments so will be subject to the usual affordability testing, which the team here at Love Mortgages are more than happy to help you with.

It is important to remember lenders will have different criteria when it comes to offering these mortgages – some may only offer to first time buyers, some may only offer at certain fixed rates and some may not offer them for new build properties. Here at Love Mortgages, we would be happy to discuss your options and see which lenders criteria you fit.

Why Have the Government Introduced This Scheme?

There are a number of reasons the government have introduced this mortgage scheme that they themselves are backing. The government have been extremely transparent with their desire to tackle equality in the housing market and make it easier for people to get on the property ladder.

Not only have they pledged to build more homes but they have also introduced measures to make it easier for people to actually buy their first homes. Many people have previously looked into home-ownership but didn’t have a large enough deposit to enable them to buy. This scheme is in place to help make that much more achievable.
It is one of a number of home-ownership options available including Help to Buy and Shared Ownership.

Do you have any questions about getting a mortgage and buying a home? Contact us here at any time for a no-obligation chat.

How Can We Help You?

Whether you are a first-time buyer or someone looking for a new mortgage, we can help you find the right deal for you. We search thousands of mortgage deals available to us and pick out the right one for you and your circumstances.

With the new 95% mortgages, we have wide and independent access to a number of lenders who offer these and can easily find the best deal for you. The team here at Love Mortgages have extensive knowledge of lenders criteria and we have a vast amount of experience in the mortgages and financial services industry. This means we know what we are talking about and know how to ensure you get exactly the deal you require.

Want to Discuss A 95% Mortgage with Us?

If you are considering a 95% mortgage, feel free to give us a call on 01244 90 44 10 at any time and we can talk about getting you your first ever mortgage.

We have a wonderful team of friendly advisors who will make every effort to help you secure your dream home. We will assess your requirements and lenders criteria and find the perfect mortgage deal for you.

For the leading mortgage advice in both Chester and Mold, please do not hesitate to get in contact with us today, we would love to hear from you.

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