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What Mortgage Schemes Are Available?

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If you are struggling to save for your mortgage deposit, you should consider looking at the government mortgage schemes available.

There are many different mortgage schemes available that can help make getting a mortgage more affordable.

What is a mortgage scheme?

The government wanted to create a way to make homeownership more accessible. Their plan involved creating a series of mortgage schemes to help buyers get onto the property ladder.

Each mortgage scheme works in a different way. Some help you save for your mortgage deposit, whereas others help you buy a property.

How can I access a mortgage scheme?

Each mortgage scheme has a set criteria that must be met before qualifying.

Not everyone will be eligible for every mortgage scheme. For example, some schemes can only be accessed by first time buyers, whereas others can be accessed by first time buyer and existing home owners.

List of mortgage schemes

Here is a complete list of the current government mortgage schemes available:

Shared Ownership

How does Shared Ownership work?

Perhaps the most popular and most used scheme is Shared Ownership.

Shared Ownership allows home buyers to take out a mortgage on a share of the property. This share is usually between 25%-75%, although sometimes you can take out as low as 10%.

You will also have to pay rent to the other property owner (usually your landlord or building society). This is worked out on the percentage share that they own.

Each month, you will have your mortgage payments on the share of the property you own and rent payments on the share of the property that the other party owns.

Shared Ownership Criteria

To be eligible for Shared Ownership, you must meet the following criteria:

Buying a Home with Shared Ownership

Once you have qualified for the Shared Ownership Scheme, you can begin your mortgage process.

With Shared Ownership, you will still need to find a suitable mortgage product based on the share that you own. This is the part where we come in!

Your mortgage advisor will search through 1000s of mortgages on your behalf, to find the perfect mortgage deal for your personal and financial situation.

Once we find a tailor-made product for your Shared Ownership property, we can begin looking at preparing your final mortgage application.

Speak to a Shared Ownership Mortgage Advisor – It’s Free!

Send a message, ask a question or arrange a callback with one our mortgage advisors.

Right to Buy

How does Right to Buy work?

Right to Buy helps eligible council and housing association tenants purchase their homes at a discounted rate.

Discounts can rise up to £136,400 (£102,400 outside of London). This discount can only be utilised if you have been living as a secure tenant and been a public sector tenant for at least three years.

This scheme is designed to make homeownership more accessible for individuals who might not otherwise be able to afford it.

Right to Buy Criteria

To be eligible for the Right to Buy Scheme, the following conditions must be met:

Buying a Home with Right to Buy

To start the application, tenants need to complete the Right to Buy application form (RTB1) and submit it to their landlord.

The landlord then has up to four weeks (or eight weeks if the tenancy has been for less than three years) to respond and confirm eligibility.

If the application is approved, the landlord will send an offer notice, detailing the property’s market value, the discount applied, and the price at which it can be bought. Tenants typically have 12 weeks to decide whether to proceed with the purchase.

During this period, it is advisable to speak with a mortgage advisor to arrange your Right to Buy mortgage. Once all preparations are complete, tenants can proceed to complete the purchase, becoming homeowners under the Right to Buy scheme.

Have a Question About Right to Buy Mortgages?

Send a message, ask a question or arrange a callback with one our mortgage advisors.

Mortgage Guarantee Scheme

How does the Mortgage Guarantee Scheme work?

The Mortgage Guarantee Scheme is a government-backed initiative that enables homebuyers to purchase with a 5% deposit.

Taking out a mortgage with a 5% deposit allows homebuyers to access a 95% LTV Mortgage.

The scheme is accessible to both first time buyers and existing homeowners. This makes buying a property more accessible, enabling a wider range of individuals to take a step up the property ladder.

Mortgage Guarantee Scheme Criteria

To be eligible for the Mortgage Guarantee Scheme, you must meet the following criteria:

Buying a Home with the Mortgage Guarantee Scheme

The Mortgage Guarantee Scheme is designed to help individuals purchase a home with a smaller deposit, making homeownership more attainable.

The process begins by finding a suitable property within the UK, ensuring it does not exceed the £600,000 limit set by the scheme. Once you have found a property you want to make an offer on/made an offer on a property, the next step is to secure a mortgage. You will need to make sure that you have a deposit of at least 5% of the property’s value.

Next, you must begin preparing your mortgage application. The most simple way to do this is through a mortgage broker. They will arrange your mortgage and complete your mortgage application for you, ensuring a smooth-sailing process.

You will then undergo a thorough credit check and assess your financial situation to ensure you meet the criteria. If approved, the government provides a guarantee to the lender for a portion of the mortgage, reducing the lender’s risk and encouraging them to offer loans to those with smaller deposits.

Once the mortgage is secured, the mortgage broker can then proceed with the usual steps of purchasing a home, such as hiring a solicitor, conducting surveys, and finalising the purchase.

Have a 5% Deposit?

If you have a 5% deposit, you may be eligible for a mortgage under the Mortgage Guarantee Scheme.

Lifetime ISA

How does the Lifetime ISA work?

The Lifetime ISA, also known as LISA, is a type of savings account where individuals can save for their first home or retirement.

In each tax year, you can save up to £4,000 in your Lifetime ISA. This cap is in place because the government top up your savings by 25% each year. Thus, if you maximise your contributions at £4,000, the government will generously add an additional £1,000 to your account.

Even if you do not manage to reach the savings cap, the government will still provide a 25% bonus on what you’ve managed to save.

If you are struggling to save for your first mortgage, this scheme is perfect for you!

Lifetime ISA Criteria

To open a Lifetime ISA account, you need to meet the criteria before you qualify:

Buying a Home with the Lifetime ISA

Once you have saved up enough for your deposit, it is important to know that you should not withdraw from your Lifetime ISA. Withdrawing at any point from the Lifetime ISA will result in a 25% withdrawal fee.

If you want to use the funds to buy your first home, you need to contact the bank your LISA account is and they can arrange for the funds to be released.

When speaking with a mortgage broker, they can liaise with the bank on your behalf if this is something that you need help with. Once the bank has accepted your withdrawal request, we can begin finding the perfect mortgage for your personal and financial situation.

Got Your Lifetime ISA Savings Ready?

If you have your LISA savings ready and need help finding the perfect mortgage for your new home, we’re here to help.

Forces Help to Buy

How does the Forces Help to Buy Scheme work?

The Forces Help to Buy Scheme is a government-backed initiative made to help armed forces members purchase their first home or move to a new property.

The Forces Help to Buy Scheme offers service members an interest-free loan of up to 50% of their annual salary, capped at £25,000. This loan can be utilised for covering a deposit and related expenses associated with purchasing a home.

The scheme is only accessible to regular service personnel who have served for at least 12 months. The repayment of the loan occurs over a ten-year period through payroll deductions.

The funds acquired through this scheme can be employed for various purposes, including buying a new home, relocating closer to the place of work, adapting a residence for medical requirements, or extending a property to accommodate changing family needs.

Forces Help to Buy Criteria

The Forces Help to Buy Scheme is available to personnel who:

Buying a Home with the Forces Help to Buy

Buying a home through the Forces Help to Buy Scheme involves a straightforward process designed to assist military personnel in achieving homeownership.

Eligible service members can apply for an interest-free loan of up to 50% of their annual salary, capped at £25,000, to cover a deposit and associated expenses.

To begin the process, applicants must ensure they meet the eligibility criteria. Once eligibility is confirmed, service members can apply for the loan.

The application typically involves providing documentation to verify service history and financial status.

Upon approval, the loan is repaid over ten years through payroll deductions. This scheme offers military personnel a valuable opportunity to take significant steps towards homeownership, providing financial support and guidance throughout the process.

Have a Question for Our Mortgage Advisors?

If are looking to utilise any of these schemes and want further advice from an expert, don’t hesitate to get in touch.

Mortgage schemes advice

If you want further clarification on any of the schemes mentioned above, make sure to reach out to our mortgage advisors.

We have been helping homebuyers achieve their mortgage goals for over 20 years! Having come across 1000s of different mortgage scenarios, we are confident that we will be able to help you through your mortgage journey.

Book a free mortgage appointment online and speak to our mortgage advisors about your situation and mortgage goals today.

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