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19th April 2021

Chestnut Homes welcomes 95% mortgage guarantee scheme

Chestnut Homes has welcomed the launch of a Government scheme that encourages lenders to offer 95 per cent loan-to-value mortgages.


The Mortgage Guarantee Scheme went live on Monday (19 April). Under the initiative, the Government will offer a guarantee to lenders on a proportion of a 95 per cent mortgage, effectively sharing the financial risk.


Helene Key, Sales Manager for Chestnut Homes, said: “High loan-to-value mortgages have been in short supply since the start of the pandemic and this has hindered many people in buying their first or next home.


“The importance of the property market to the economy has rarely been more evident than over the past year. For the market to function successfully, people at every level need to be able to move home. This scheme will not just help first-time buyers, it will also enable people with limited equity in their home to move up the ladder.”


The scheme is available on homes priced up to £600,000, providing they are not a buy-to-let property or a second home. The Government will guarantee loans for second hand and new build homes, but each lender will set their own criteria.


Helene added: “The Mortgage Guarantee Scheme should increase the availability of mortgages and in turn, encourage competition among mortgage lenders. That can only be good news for buyers.


“Coupled with the stamp duty holiday and other initiatives such as Help to Buy, the new scheme further strengthens the outlook for the property market in 2021 and beyond.”


Help to Buy is available to first-time buyers purchasing a new home with a five per cent deposit and a 75 per cent mortgage. The remaining 20 per cent is provided as an equity loan which has no interest to pay for the first five years. The scheme is subject to regional price caps, with the maximum eligible home value set at £261,900 for Lincolnshire.


Last year the Government announced a temporary suspension of stamp duty on homes priced up to £500,000. This has been extended to the end of June this year when the threshold will be reduced to £250,000 for a further four months. From October, stamp duty will be payable on homes priced over £125,000.


For more information on how Chestnut Homes can help you to buy, click here 

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