Deposit Unlock scheme explained

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.

Angela Kerr Director, Editor

What is Deposit Unlock?

Deposit Unlock is a scheme that lets you buy a new build home from a participating home builder with just a 5% deposit, using a mortgage from a participating lender. These mortgages are only available via mortgage brokers. First time buyers and home movers can use the Deposit Unlock scheme.

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.

Get expert fee-free advice on Deposit Unlock mortgages from award-winning mortgage brokers L&C.

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 in the UK, 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.

Read more about buying a new build home and new build mortgages.

Use this mortgage cost calculator to see what your monthly mortgage payments will be for different options to work out what you can afford.

Which home builders are signed up to Deposit Unlock?

To be eligible for the scheme, you’ll need to find a new build home offered using Deposit Unlock with one of the following participating home builders.

Deposit Unlock Mortgages

There are currently only a few mortgage providers that will offer mortgages to people buying through the Deposit Unlock scheme: Accord, Perenna and Bluestone Mortgages. And these mortgages are only available via a broker.

Considering the Deposit Unlock scheme? Get expert fee-free mortgage advice from award-winning mortgage brokers L&C. They search the market to find you the best deal.

Accord Mortgages Deposit Unlock mortgage

With Accord Mortgages, you can borrow up to £600,000 when buying a home through the Deposit Unlock scheme. But you’ll need to go via a mortgage broker to get access to the deals. In Winter 2025, Accord Mortgages offered a 5 year Deposit Unlock fixed rate of 5.25%, with an arrangement fee of £495 with a free valuation and £250 cashback.

While if you’re looking for a 2 year fix, Accord Mortgages offers a rate of 5.71% with a £495 arrangement fee, £250 cashback and a free valuation.

But rates are subject to change so speak to a fee-free mortgage broker to get the latest rates.

Perenna Deposit Unlock mortgages

Perenna offers long-term Deposit Unlock mortgages. For example, in Winter 2025, Perenna offers a rate of 6.46% on terms of 10 to 30 years with a product fee of £1,999. Although you won’t pay an early repayment charge after 5 years.

Bluestone Mortgages Deposit Unlock

Bluestone Mortgages offer Deposit Unlock mortgages up to £600,000. In Winter 2025 Bluestone Mortgages offered Deposit Unlock mortgages at 7.04% for a 2 year fix with a £1,495 fee. For a 5 year fix, it offers a Deposit Unlock mortgage rate of 6.79% with a fee of £1,495. While these rates are higher than other lenders’, it may be an option if you don’t fit mainstream lenders’ lending criteria. Experienced credit issues in the past? Read our guide on Bad credit mortgages.

Again, rates are subject to change. And as these mortgages are only available through mortgage brokers, call a fee-free mortgage broker to find out your options is advisable as one of your first steps.

Newcastle Building Society Deposit Unlock mortgage

Newcastle Building Society was the first lender to announce a mortgage completion under the Deposit Unlock scheme in November 2021. This was part of a pilot scheme in North East England that involved properties with a maximum value of £330,000. Since then, Newcastle increased its maximum loan amount to £750,000.

However, Newcastle Building Society no longer offers Deposit Unlock mortgages.

Nationwide Deposit Unlock mortgage

Nationwide did offers loans on homes bought through the Deposit Unlock scheme up to £750,000, available through mortgage brokers. However, it stopped accepting Deposit Unlock applications on 22 November 2024.

What are the benefits of the Deposit Unlock scheme?

The main benefit of Deposit Unlock is that it is another scheme offering first time buyers – and home movers – access to 95% mortgages on new build properties.

However there are also limitations to the scheme: it is not suitable for individuals who would own another property on completion, for example a buy-to-let.

Considering the Deposit Unlock scheme? Get expert fee-free mortgage advice from award-winning mortgage brokers L&C. They search the market to find you the best deal.

Own New Rate Reducer: an alternative to Deposit Unlock

There is another scheme designed to make it easier and cheaper to buy a new build home. The Own New Rate Reducer scheme allows you to buy a new build home with a mortgage and pay a lower mortgage rate than if you buy on the open market with a traditional mortgage. When you choose your property, the developer will agree to contribute 3% or 5% of the purchase price. House builders do this as an incentive for you to buy their properties.

The developer’s contribution goes to your mortgage lender, via Own New. The lender will take the developer’s contribution of 3% or 5% and offset it against the mortgage interest to reduce your monthly payments for the first 2 or 5 years, depending on the length of your initial term. See our guide for more information on the Own New Rate Reducer scheme.

New build with a 5% deposit: Deposit Drop scheme

Own New also offers the Deposit Drop scheme, which lets people buy a new build home with a 5% deposit. It launched in the North East and Yorkshire in 2023, with plans to broaden out where it’s available in due course.

To buy a home through Own New you’ll need to speak to an approved mortgage broker. Speak to fee-free mortgage brokers L&C today to find out more.

Is Deposit Unlock a good idea?

Any scheme that can help people buy a home with a small deposit is worth looking into. However, it’s important to think about the limitations too. These include:

• Limited choice of properties: One of the main limitations of using this scheme is that you can only purchase a home from a participating builder. More than 35 of HBFs member house builders are part of the scheme which account for a significant percentage of all homes built in the UK. But it’s not clear if the builders will offer the scheme on all their sites or in selected sites only.
• Limited mortgage lender choice: At this early stage of the scheme, only a few mortgage lenders are currently signed up. This means buyers may not always get access to the best mortgage rates on the market.
• New build premium: Beware the ‘new build premium’: lots of benefits of buying a new build disappear on the day you buy it as it is no longer ‘brand new’. And so, a one-year old property may fall in value as potential buyers consider other nearby new-builds. So our advice is, if you are buying a new-build, plan to live in it for the longer term.

Investigate other ways to get a mortgage with a 5% deposit

The scheme isn’t the only way to get a mortgage with a 5% deposit. 95% mortgages are now more prevalent after the government introduced the Mortgage Guarantee Scheme. And if you can’t get a 95% mortgage on a new build, why not consider buying an older property. If you go down this route you’ll have a much wider choice of property that you can buy and have access to a wider range of lenders too. So make sure you speak to a broker to explore your options.

Also, buying on the open market, whether it’s a new build or older property, without the assistance of a scheme, is by far the best option as you’ll have access to the best mortgage rates. So if you are lucky and have access to the Bank of Mum and Dad or time to save a little longer, then explore those options as well. Or you may consider shared ownership or the First Homes Scheme.

Get fee free advice on all your first time buyer mortgage options with mortgage brokers L&C

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