Advantages and disadvantages of the new government sponsored 95% mortgages.
With the guarantee provided by the government lenders have started to offer 95% mortgages again. Even better news is that the scheme is not restricted to new builds.
It is thought that over 70% of private renters and those living with parents are saving for a deposit to buy a home. In the UK homeownership is still a goal to strive for.
Available to both first time buyers and home movers.
Property values up to £600,000.
Scheme available until 31st December 2022.
Available to non-new builds. So will offer a wider selection of properties to choose from.
No new build property.
Value of property limited to income multiples and cannot be just a share or topped up with a loan such as a Help to buy purchases. Complete our affordability form to get an accurate maximum loan availability.
Higher rates – under the scheme the lowest rates currently available is around 3.75% for a 95% loan. Rates may fall if more lenders join the scheme.
Compare that with a 90% mortgage with 10% deposit. The lowest rates are around 2.99% for a 2 yr fixed.
Lower income multiples. Maximum may be around 4.5x income. Compared to one high street lender offering 5.5x income at 90% if you take a 5 or 10 year fixed rate.