In a nutshell, Deposit Unlock is a new scheme that have been developed to assist first-time buyers and home movers to buy new build homes with a deposit of just 5%!
Given lenders are often reluctant to offer high loan-to-value mortgages on new builds, Deposit Unlock, quite literally, opens doors. And with the Help to Buy equity loan scheme coming to an end in 2023, this new scheme will certainly fill a void.
Devised alongside lenders and the house-building industry, the scheme provides competitive mortgages that make buying a new home a possibility, rather than a pipe dream.
Exclusively for new build homes only, you can only use this scheme by purchasing new build properties sold by participating builders and lenders.
Much like buying a brand-new car, when a new-build home is purchased, it’s value depreciates, setting alarm bells off for many a lender.
To that end, mortgage lenders have generally been more inclined to restrict the amount they are willing to lend, with minimum deposits of around15%, but sometimes as high as 25% - an impossible feat for most.
By taking away some of the risk, it’s with thanks to the house builder/developer that the Deposit Unlock helps tackle this problem…
Using money from the sale of the property, the house builder pays the mortgage to the lender, diminishing the risk and making lenders more accepting of high, new-build LTV mortgages.
Exactly how much you can borrow will depend on the lender and your personal financial circumstances, and the scheme is currently capped at £750,000.
One of Britain’s largest lenders, Nationwide, were among the first to sign up to the scheme - alongside 17 housebuilders – offering loans from as little as £25,000.
Each lender will set their own interest rates and affordability criteria, so as with all mortgages, the terms and conditions will vary and with Deposit Unlock mortgages only available through mortgage brokers, Top House Mortgage Solutions are well-placed to help, without you having to pay us any fees.
For further information, to find out if you are eligible and to find out how much you can borrow, just get in touch – we’re here to help.
