Joy for first-time buyers as 5% deposit mortgages return
- Credit: Getty Images/iStockphoto
Mortgages requiring just a 5% deposit have been reintroduced - in what is set to be a boost for first-time buyers trying to get onto the property ladder.
The average price tag on a home in the country has jumped by nearly £7,000 in the space of the month.
That has pushed average seller asking prices to a new record high of £327,797 in April, according to property website Rightmove.
But chancellor Rishi Sunak has revealed there will be a new mortgage guarantee scheme starting this month.
While the pandemic has given some first-time buyers time to save up cash, many have been unable to climb on the property ladder without finding at least a 10% deposit.
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Now, this new scheme will provide a guarantee to lenders who offer mortgages to people with a deposit of just 5% on homes valued up to £600,000.
Buyers will also be able to fix their initial mortgage rate for at least five years if they want.
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The scheme will be available for new mortgages up to December 31, 2022.