Mortgage guarantees

What do I need to know?

With a mortgage guarantee you’ll still need a deposit of at least 5 per cent but the government will guarantee up to 15 per cent of your mortgage. The scheme is intended to increase the availability of mortgages at competitive interest rates even if you only have a small deposit.

The government will guarantee repayment of up to 15 per cent of your mortgage to the lender if you default. This means you’ll still need a 5 per cent deposit and a 95 per cent mortgage, but as 15 per cent of that 95 per cent will be guaranteed, you’re more likely to have access a wider variety of mortgages.

Crucial points:

  • They are available to both first-time buyers and existing home owners
  • You’ll need a minimum of a 5 per cent deposit
  • It must be your only property
  • It is available on all previously owned and new-build properties in the UK up to a £600,000 value
  • You can borrow only from a participating mortgage lender
  • It cannot be part of a shared ownership or shared-equity purchase
  • The scheme will run until 31 December 2016

Speak to a mortgage adviser to help you find the best solution for your circumstances.