Mortgage Guarantee Scheme: Who Qualifies and What You Get
Learn how the Mortgage Guarantee Scheme helps first-time buyers and homeowners secure a mortgage with a smaller deposit.
The Mortgage Guarantee Scheme is a program designed to help people secure a mortgage when they do not have a large deposit.
Who it's for
This scheme is available to first-time buyers or existing homeowners who are looking to purchase a property valued up to £600,000.
What you get
The government provides a guarantee to mortgage lenders, which makes it easier for them to offer mortgages to people with smaller deposits. This allows you to access a 95% mortgage, meaning you only need to provide a 5% deposit of the property's value.
What it costs you
You will need to have a 5% deposit ready. Aside from the deposit, you are responsible for all standard mortgage fees associated with your loan.
The catch to know
It is important to understand that this guarantee is designed to protect the lender, not the borrower. While it makes it easier for the bank to lend to you, you must still pass all standard affordability checks to prove you can manage the monthly repayments.
How to apply
- Research mortgage products that include this government guarantee.
- Speak with a mortgage broker or lender to see if you qualify.
- Undergo the lender's standard affordability and credit checks.
- Follow the application process provided by your chosen lender.
For more details, visit the official portal: https://www.gov.uk/government/publications/mortgage-guarantee-scheme