As the Help to Buy scheme was brought forward by 3 months, a number of lenders are yet to confirm their mortgage rates for this product, however, from the lenders who have confirmed their rates we are able to confirm a 2 year fixed-rate mortgage starting at 4.99% for those with a 5% deposit, there is no fee with this mortgage. For the most up to date information of available deals please contact us. We expect more lenders to be joining the scheme by the end of 2013.
The ‘Help to Buy’ scheme is a term that has been popular over recent years, in an attempt to help people get onto the housing ladder and stimulate the building industry.
The Help to Buy scheme was originally created to help first time buyers buy new ‘new build’ property from developers, this opened to doors to new buyers who only had a 5% deposit when other 95% mortgages where hard to come by. The only down side was that in many areas there either wasn’t the new build property available, or that the new build property was more expensive than other older-style property, for example a 2 bed room terrace property.
To help this situation the Government had planned to extend Help to Buy to cover existing (older) property from January 2014, however a surprise announcement before the Conservative October conference revealed that they were bringing the scheme forward with immediate effect, so from October 2013 first time buyers who qualify for the Help to Buy scheme could choice whether to buy a new build property or an older property.
- Help to buy mortgages for existing property
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So, what is this scheme and who is it for?
- The scheme applies to ANY property, not just new builds.
- The scheme is available to first time buyers and home movers
- The scheme will offer buyers a headline-grabbing 95 % mortgage, so buyers only need a 5 % deposit.
- The Government will add another 15 %
- The Government will underwrite the cost of offering this mortgage, the 15%, by more than £12 million of ‘guarantees.’
- The underwriting amount is designed to reassure banks that those taking out a 95% mortgage will not default on their payments, resulting in a similar crisis to 2008.
- The scheme is available on any property up to the value of £600,000, and includes new and older properties.
- The scheme is for anybody, but particularly those who would typically struggle to save enough for a deposit under the previous minimum ten % requirement.
- Only repayment mortgages are included in this scheme.
- It will not include interest-only or self-certification mortgages.
- Stringent checks will be made to make sure buyers can afford the repayments to satisfy the lenders affordability criteria
- Applications open October 2013.
- Various High Street mortgage providers have already signed up.
- Only available for residential properties and you can only be named on one mortgage this rules out people with background Buy to Lets.
How is it different from the existing ‘Help to Buy’ scheme?
Primarily because it allows purchasers to buy any property, not just new builds. It is also different because it has been brought forward and also because it is intended to stimulate the housing market at all levels and spectrums, not just new build properties or to those with a certain household income.
Help to Buy mortgage lenders
There has been a number of announcements recently from various lenders, as the scheme was brought forward by 3 months, we do expect there to be more announcements between now and January 2014 (when the scheme was intended to start) so to be sure you are in possession of all the latest information please contact us.
The lenders who have confirmed they are supporting the scheme include Lloyds, Halifax, Bank of Scotland, RBS, NatWest. Virgin Money, HSBC and Aldermore have confirmed they will soon be joining the scheme.
How can Ascot Mortgages help?
The predication is that the new scheme will generate a massive demand for properties, because it can be used against a property of any age. It is expected that many mortgage lenders will decide to get involved in the scheme, and offer borrowing for it. It is important, as the housing market looks buoyant for the first time in many years, that buyers still exercise caution and do not get taken in by headline offers, that might not be as good as they initially seem. Ascot Mortgage, experienced brokers, can make sure that this does not happen by using their expertise to keep up to date with the developments.
The overall cost for comparison is 4.4% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.