Government extends Mortgage Guarantee Scheme
In the 2023 Autumn Statement, it was announced that the Government will extend the Mortgage Guarantee Scheme. It was initially due to end in 2023, but it will run an additional 18 months until the end of June 2025. Adam Nanson, Mortgage Broker at Your Mortgage Expert in Salisbury talks about what this means for home buyers.
What is the Mortgage Guarantee Scheme?
“The scheme was initially launched during the Covid-19 Pandemic amid concerns around the economy and the wider housing market.
“It was designed to encourage more lenders to offer products at a 95% Loan to Value by taking on some of the risk from the lender. If house prices were to fall – low deposit houses are more likely to fall into negative equity so are seen as more risky for lenders. Under the Mortgage Guarantee Scheme, the Government agrees to compensate the lender for a portion of their losses in the event of repossession.”
Who is the Mortgage Guarantee Scheme for?
“The scheme is designed to help purchases of residential properties. This means that current homeowners and First Time Buyers can take advantage. However, it can not be used to buy second homes or Buy to Let properties.
“As always, the lender will go through standard affordability checks. You’ll need to apply for a repayment (not interest-only) mortgage. And you will need to have a 5% deposit.
“The Mortgage Guarantee Scheme isn’t for everyone. Your first step should be to speak to a broker like us who can give you advice on the Mortgage Guarantee Scheme.
“There are other schemes available such as the Deposit Unlock Scheme and the Shared Ownership Scheme which might be more suited to your circumstances. We have experience helping clients with all these schemes and will take the time to understand what is right for you.”
We don’t charge anything up front, so by speaking to us, you are under no obligation. We are based in Salisbury, Wiltshire, but we can help you no matter where you live in the UK.
Simply call us on 01722 322683 or complete a contact us form on our website and tell us when it would be best to get back in touch with you.
The information contained within this article was correct at the time of publication. It is intended for information only and should not be used as a basis for purchasing any products. We cannot be held responsible for something that was correct at the time but subsequently changes or goes out of date. For further information, contact Your Mortgage Expert on 01722 322683.