The Deposit Unlock scheme helps first time buyers and home movers buy a new build home with a 5% deposit. We look at how it works, Deposit Unlock scheme mortgage options and whether it’s the best option for you.
What is Deposit Unlock?
Deposit Unlock allows you to buy a new build home from a participating home builder with just a 5% deposit, using a mortgage from a participating lender. The scheme has been developed by the Home Builders Federation, with lenders and the house building industry. First time buyers and home movers can use the Deposit Unlock scheme.
New build mortgage brokers in Derby
While Deposit Unlock is still fairly new, it may prove popular with buyers as a way to purchase a new build home with a small deposit as lenders are often reluctant to offer high loan-to-value mortgages on new build homes.
It is also likely to fill the gap after the Help to Buy Equity Loan scheme, which let first time buyers purchase a new build home with a 5% deposit, closed to new applicants in October 2022.
How does the Deposit Unlock scheme work?
Mortgage lenders are often stricter on the amount they are willing to lend on the purchase of new builds. This is to protect themselves from the inevitable devaluation of the property in the early years and other risk factors. As such, they often set the minimum deposit for new build properties at 15% or even 25%.
Deposit Unlock gets round that and allows you to buy a new build with just a 5% deposit. With the Deposit Unlock scheme, the house builders pay to insure the mortgages instead. And they use some of the money from selling the homes for this purpose; the aim is to make lenders more comfortable about offering high LTV mortgages on new builds.
This scheme is exclusively for new build homes.
And the maximum loan you can take out to buy a property through the Deposit Unlock scheme is currently £750,000. Although this depends on the lender and your circumstances.
Which home builders are signed up to Deposit Unlock?
To be eligible, you’ll need to find a new build home offered under the Deposit Unlock scheme with one of the following participating home builders:
Anderson
Ashberry Homes
Barratt Homes
Barratt London
Bellway
Bellway London
Bewley Homes
Bloor Homes
Bovis Homes
City & Country
Countryside Properties
Crest Nicholson
Croudace Group
Davidsons Homes
David Wilson Homes
Devine Homes
Edenstone Homes
Fairview Homes
Glesson
Hayfield Homes
Hill
Ilke Homes
Keepmoat Homes
Linden Homes
Mandale Homes
Miller Homes
Morris Homes
Nicholas King Homes
Norfolk Homes
Pat Munro Homes
Persimmon
Prospect Homes
Redrow
St Modwen Homes
Stonebridge
Taylor Wimpey
Thakeham
Vistry
Wheeldon
Deposit Unlock Mortgages
There are currently only a few mortgage providers that will offer mortgages to people buying through the Deposit Unlock scheme. And these mortgages are only available via a broker.
Comments