Government launches mortgage guarantee scheme

A new government-backed mortgage scheme to help people with 5% deposits get on to the housing ladder is available to lenders from today.

First announced at the Budget, the scheme is designed to help first time buyers or current home owners secure a mortgage with a 5% deposit to buy a house of up to £600,000. However it is not expected to be available for new build, at least initially.

The government will offer lenders the guarantee they need to provide mortgages that cover the other 95%, subject to affordability checks.

The scheme is now available from lenders on high streets across the country, with Lloyds, Santander, Barclays, HSBC and NatWest launching mortgages under the scheme today and Virgin Money following next month.

The government says that since 2010, more than 687,000 households have been helped into home ownership through its schemes, but - when asked - 69% of private renters and 63% of those living at home who had looked into a mortgage said they cannot find many mortgages with a low deposit.

Housing secretary Robert Jenrick said: “For too many people, no matter how hard they work, home ownership can seem out of reach. One of the biggest divides in our country …