95% Mortgage Guarantee scheme is here!
From today buyers will be able to purchase properties worth up to £600,000 with just a five per cent mortgage, under a government guarantee scheme.
First time buyers and existing homeowners will be able to take advantage and a growing number of mortgage lenders have come forward to take part - most recently Halifax, which over the weekend revealed it would launch its 95 per cent deals today as well.
While many borrowers can afford to pay the mortgage for the average mortgage rate, they also need to pass a mortgage affordability test.
For the 95 per cent scheme the affordability test is set at being able to afford a mortgage at three per cent over the standard variable rate which is currently 3.6 per cent. This means a new borrower may need to be able to afford a 6.6 per cent mortgage rate.
Rightmove’s property data director Tim Bannister adds: “The new mortgage scheme could help some first-time buyers bring their plans forward if they have a lower deposit but are still able to pass the affordability checks, and will be welcomed by those who last year we’re struggling to come up with a 15 or 20 per cent deposit.”
To see if this is an option for yourself contact our mortgage adviser, Christopher Clarke on 01932 232927, or complete the form below.
Source: estateagenttoday.co.uk