16 June 2022

A new way to buy a new-build home with a low deposit


A new way to buy a new-build home with a low deposit

Saving for a deposit can be extremely challenging for first-time buyers, and many existing homeowners have low equity in their homes – this is where Deposit Unlock can help.

Deposit Unlock is a new scheme that helps first-time buyers and home movers to purchase a new build home with just a 5% deposit.  It is designed to help buyers purchase a new build property with a smaller deposit, much like the Help-To-Buy scheme that comes to an end in 2023. The difference with Deposit Unlock is that this scheme is open to both first-time buyers and home movers alike.

Developed by the Home Builders Federation, mortgage lenders and the house building industry, this scheme helps you to step on or move up the property ladder across England, Scotland, and Wales.


How much can you borrow?

This scheme allows buyers to borrow between 90.01% and 95% Loan to Value (LTV) of the property. The maximum loan amount for this scheme is £750,000, and the length of the loan can be taken out for up to 40 years.


Deposit Unlock mortgage lenders

There are currently onto two mortgage providers under the current scheme. These lenders are Newcastle Building Society and Nationwide. Your mortgage broker will be able to find the best deals for your circumstances, and explain an in-depth breakdown of the interest you will be paying back over the term of your mortgage. It is expected that more lenders would join the scheme in the coming months.


Who are the participating house builders?

  • Barratt Homes
  • Bellway Homes
  • Bewley Homes
  • Bloor Homes
  • Countryside Properties
  • Crest Nicholson
  • Croudace Homes
  • Davidson Group
  • Fairview Homes
  • Hill Group
  • Persimmon Homes
  • Redrow Homes
  • Taylor Wimpey
  • Vistry Group


How does it work?

Upon completion, the developer will pay a percentage of the purchase price of the property into an insurance policy. This reduces the risk for the mortgage provider in the event of the home buyer not being able to afford the repayments.


What properties can be bought under the scheme?

This scheme is exclusively available to new build homes. This covers detached, semi-detached, terrace houses, townhouses, coach houses, bungalows, flats and apartments for up to £750,000.


Who is eligible for the deposit unlock scheme?

This scheme is designed to help those with small deposits get on or move up the housing ladder. It is restricted to owner occupied homes only, so buy-to-let borrowers will not be eligible.


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