The Deposit Unlock Scheme
The Deposit Unlock scheme has been introduced to help first-time buyers and home movers purchase a new build property with just a 5% deposit.
What is the Deposit Unlock scheme?
The Deposit Unlock scheme allows you to purchase a new build property with as little as 5% deposit. Prior to this being introduced, the minimum deposit needed would often have been 10% or 15% for a new build home, making it difficult for many buyers to get on – or move up – the property ladder.
How does the Deposit Unlock scheme work?
Mortgage lenders often require a larger deposit when a new build property is being purchased. This is largely due to concerns about the future value of the property and the perception of greater financial risk.
The Deposit Unlock scheme helps get around this by the home builder paying for an insurance policy to cover the mortgage. The aim of this insurance is to provide the lender with extra security, allowing them to offer you a mortgage with a lower deposit requirement. This makes new build homes more accessible and affordable for a wider range of buyers.
Who can apply for the Deposit Unlock scheme?
To be eligible for this scheme you need to:
Be a first-time buyer or moving home
Have at least 5% deposit
Be buying a new build, not a pre-owned property
Purchase the property from a builder participating in the scheme
Do I have to be a first-time buyer?
No, you don’t. This scheme is open to both first-time buyers and existing homeowners, as long as you are purchasing a new build property from a participating developer. This makes it a flexible option for people looking to move to a new home with a small deposit.
What are the benefits?
One of the key advantages of Deposit Unlock is that it enables buyers with a smaller deposit to access competitive mortgage rates that would otherwise only be available with a much larger deposit. This can reduce the financial burden of saving while also allowing you to move sooner than expected. It can also be a great option for people who have strong monthly affordability but struggle to raise a substantial lump sum upfront.
Are there any downsides?
As with any scheme, there are some considerations to keep in mind. The choice of mortgage lenders and rates available through the scheme may be more limited than the open market. Additionally, new build properties can sometimes come with a price premium, so it’s worth comparing prices and exploring other support options such as shared ownership or the First Homes scheme to ensure you’re getting the best deal.
What property developers are currently offering the Deposit Unlock scheme?
There are many developers across the UK offering this scheme. You’ll need to check with the development you’re interested in to confirm whether they support Deposit Unlock.
We are currently working with Pearce Fine Homes, who are actively supporting the scheme and offering a great selection of new build properties.
Get in touch
If you are considering buying a new build home and want to explore whether the Deposit Unlock scheme is right for you, get in touch with us today. We’ll help you understand your options and guide you through the process every step of the way.
Tom
Mortgage Advisor
01752 905011
info@completemortgageadvice.co.uk
Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
