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  • Advice for every step of buying a homeSee our step-by-step guide

New Mortgage Guarantee Scheme 2021

This government backed Mortgage Guarantee scheme is designed to help buyers with a 5% deposit buy a home. Learn how the 95% mortgage guarantee works and how to find the lenders that offer this

Mortgage Guarantee Scheme

New mortgage guarantee: the basics

  • From 19th April 2021 the scheme allows you to get a mortgage with just a 5% deposit. The 95% mortgage scheme will run for 18 months until December 2022.
  • 95% mortgages virtually disappeared when the pandemic started. Now that the government will offer lenders a guarantee, this will encourage them to lend again.
  • The scheme applies to all types of properties (new build and old) that cost less than £600,000.
  • First time buyers AND existing homeowners can apply.
  • You will be able to fix your initial rate for 5 years if you wish to.
  • You must have a regular income, a good credit rating and show that you can afford the monthly mortgage repayments.

How do I apply for the mortgage guarantee? 

  • Once you have found a property you want to buy, to access the mortgage guarantee, you need to find a mortgage from one of the participating lenders. A good mortgage broker can walk you through your options and find the best deal for you.

Will all mortgage lenders offer 95% mortgages?

  • Big name lenders Lloyds, Natwest, Santander, Barclays and HSBC will be offering rates for those with as little as a 5% deposit and Virgin Money a little bit later.   Although rates will still be higher than for those with bigger deposits, the wider choice has helped improve the options.

Use our online mortgage finder, or speak to our award winning mortgage brokers for free expert advice, to start getting the best deal today

Is the mortgage guarantee the best way to get a mortgage?

  • Not necessarily.  The guarantee will help to boost the number of 95% mortgages as they have virtually disappeared from the market when the pandemic hit.  It makes no real difference to you as a borrower whether a deal is backed by the government’s mortgage guarantee or not, so the mortgage interest rate, terms and any mortgage fees will be your guide as to the best deal with the deposit you have.  It is worth noting, that if you can push to a 10% deposit rates are considerably cheaper and there are more products on the market.
  • See our guide on types of mortgages for more detail on the different mortgage options to consider and how this affect your monthly mortgage payments.

How long will the mortgage guarantee scheme run for?

  • The plan is for the scheme to run for 18 months, from April 2021 until December 2022.
  • But you will want to watch things closely if you are interested. Supply of housing is severely limited in some parts of the country and this increased demand could push up house prices making it even harder for you to get on the housing ladder.

Find out how much you could borrow with our mortgage calculators or get mortgage advice to see what your options are

Mortgage Finder

Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.

Find a mortgage

What other help is there for me?

The Government has a range of other schemes to help you afford to buy your home such as the first time buyer  Help to Buy Equity LoanShared Ownership and Rent to Buy.

The Government is constantly updating its affordable housing programme and new first-time buyer mortgage deals are being launched all the time.

Not quite ready to buy — see what steps you can take to save to buy

It’s always a good idea to save as much as you can in advance of buying, as this obviously reduces the amount that you will have to pay back in the long term and also gives you a much wider choice of cheaper mortgage products in the short term. Here are the steps you can take to get yourself in a position to afford to buy:

  • You’ll need to work out how much you can afford to buy and, in return, how much you will need to save to be able to buy your first home. See our advice on saving for your deposit which helps you to work out your budget and tips on how to accelerate your savings.
  • Getting your credit rating in order is key to mortgage success. See how to improve your credit rating before getting a mortgage
  • If you are under 40, the Lifetime ISA could be a great way to boost your savings.  You can earn up to a £32,000 government bonus on your savings which you can use towards buying any home worth up to £450,000 or for your pension income after you reach 60.

Leave a comment (4)* Required

  1. Jennifer allanJennifer allan

    Hi I would like more information on the government help to buy for first time buyers

  2. Jem ManselJem Mansel

    I would like information on the government 5% deposit scheme for new buyers please?

  3. Juliet JulietJuliet Juliet

    I am looking for goverment help to buy me a house


    For safety of person and possessions, and with comp PI underway, we at are selling our property hastily so we can move somewhere safer.

    Do hope to get some guidance regarding this

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