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8th October 2013

Anyone for a Mortgage? Government Help to Buy

Filed Under: Business News

Banks have started to unveil the new government backed mortgages.  This initiative is designed to help buyers that cannot afford the now common place larger deposits requested since the financial crisis.

Obviously buyers will still need to meet the bank’s lending requirements, which are usually based on a multiple of income, however, under this scheme buyers only need to put down a 5% deposit.  The bank get the additional security from the government who guarantee 15% of the remaining loan in case of a default.

The scheme will be available for first-time buyers and home movers borrowing to buy new and old homes valued at no more than £600,000.

The scheme is being rolled out as surveyors’ report that sales levels are at their highest for nearly four years and there is some concern that this initiative will cause a housing bubble, but only time will tell.

To give you an idea of rates RBS and NatWest are offering two-year fixed-rate mortgages starting at 4.99%.

In addition to this scheme, the first phase of the Help to Buy scheme in England started in April.  This scheme is for buyers of newly built homes, who are eligible for a 20% equity loan from the government on top of their 5% deposit.

Daniel Langridge
01903 300230

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