This week, as part of the budget announcement that saw the extension of the stamp duty holiday, Rishi Sunak also announces that homebuyers can once again benefit from a new mortgage scheme.
We’ve dissected the announcement and answered some of our buyers’ FAQs in relation to this and how it might affect you.
So how will the scheme work?
The new scheme which launches on April 1st, will mean first time buyers and home movers will be able to purchase homes up to £600,000 with a 5% deposit only. Mortgage lenders thereafter will be incentivised by the government to offer the remaining 95% through a mortgage loan.
How is it “guaranteed”?
The guaranteed element of the announcement applies to the lender rather than you the buyer. Over the past year or so, this amount (95%) is much higher than lenders have been offering, so to cover the potential risk, the government pledges to repay lenders if you default on your payments.
Is this the right choice for me?
If you’re looking to purchase a property, and can’t raise more than a 5% deposit then yes. Coupled with the potential savings if your purchase benefits from Stamp Duty relief, you could be in your new home sooner than you think with the new support available. The best thing to do though, is contact your local Hunters agent who have in-house mortgage advisors who can arrange an appointment to discuss your needs.