95% Government Mortgage Scheme

Buy with 5% deposit with the new mortgage guarantee scheme

A mortgage guarantee scheme will enable buyers to buy a home with as little as a 5% deposit, announced by the Chancellor in the budget on Wednesday 3rd March.


This scheme will see the government offer incentives to lenders for them to offer 95% mortgages. Many big lenders have confirmed they are participating in the new government mortgage scheme.

How will it work?
 - The new mortgage guarantee scheme is available to both first time buyers and those moving on from a existing property. 

- It allows a borrower to buy a guarantee on the proportion of the mortgage between 80% and 95%.

- The maximum purchase price for a property will be £600,000. 

 - The borrower will need to pay the government a commercial fee for each mortgage in the scheme to compensate if unexpected losses under the scheme, the cost of capital of providing the guarantee and the admin costs of the scheme

Who is eligible for the Mortgage Guarantee Scheme?
The scheme is designed for help households struggling to save for the higher mortgage deposits required by current lenders.

Therefore you will need to be:
 - Applying for a residential mortgage (not a second home) and not buy-to-let taken out by an individual or individuals rather than a incorporated company

 - Looking at a property in the UK with a purchase price £600,000 or less

 - Have a loan to value of between 91% and 95%

 - Be a repayment mortgage and not interest only

 - Apply during April 2021 and to December 2022.

 - Meet the standard in terms of the assessment of the borrower's ability to pay the mortgage e.g loan to income and credit score test