The scheme guarantees part of the mortgage, typically 15%, should the borrower not be able to make their monthly repayments; reducing the risk to the lender fairly significantly, to the level of a typical home buyer with an 85% loan-to-value mortgage.
It’s good news for those looking to buy with a low deposit and are unable to build up a deposit further, but could this fuel demand further when house prices are already rising to record levels? And in fact make houses even more unaffordable for others looking to buy.
A quick look at just some of mortgages released on this scheme are:
Halifax: 2 year fixed rate - 4%
Natwest: 5 year fixed rate - 4.04%
Santander: 5 year fixed rate - 4.09%
It’s worth noting that interest rates will be lower with a 10% deposit, and if you’re looking to buy, it’s best to use an independent mortgage broker to find the best deal for you.
Firms such as Klarna and Clearpay are now facing stricter controls from the Financial Conduct Authority (FCA), who will now be responsible for regulating the sector. That means more checks on the customer when they choose to use these services.
Robert Jenrick, the Housing Secretary, has today announced that an extra £3.5bn will be used to remove cladding on high-rise buildings. And only on high-rise buildings above 18metres, and only on cladding, not other fire safety concerns.
Could it be time for you to move out of London? We've run the numbers and worked out how much you could save by moving out of London to all regions of the UK, whether you're renting or a homeowner (both mortgage repayments and house prices). Check it out below.