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Good news for buyer as 95% mortgages are back – find out if you qualify

In the budget recently, the government have offered incentives to lenders to bring back 95% mortgages. Enable’s experienced IFAs in Bishop’s Stortford had seen 95% mortgages virtually disappear during the pandemic. 

Yorkshire Building Society is set to become the first lender to relaunch 95% mortgages in the mainstream market. The deal will only be available to first-time buyers and the society will apply strict conditions on lending, including ruling out flats and new-build homes. But the Government Guarantee scheme is there to encourage more banks and building societies to help ‘generation rent” become the ‘generation buy’.

The Government’s initiative aims to encourage banks and building societies to offer 95% mortgages again. It will do this by giving them the chance to buy a guarantee on the portion of the mortgage between 80% and 95%. If a borrower gets into financial difficulty and their property is repossessed, the government will cover that chunk of the lender’s losses.

The scheme, which can be used for home loans given to remortgagers and movers as well as first-time buyers, compensates the bank or building society for some of the money lost if a borrower defaults and the property is repossessed.

Yorkshire’s 95% deal, offered through mortgage brokers, will have a rate of 3.99% fixed for five years, and comes with a £995 fee. The Building Society’s chief executive, Mike Regnier, said “he was confident the lender could shoulder the risk itself, without needing to fall back on government money. But he said it would not have re-introduced its own low deposit mortgage unless it knew other major banks were about to join the 95% market through the government scheme. “As the only lender in this market we’d struggle to meet the demand that clearly is out there for customers that have saved for years to get a 5% deposit, and will want to take every advantage of the stamp duty land tax holiday,” said Regnier.

Enable’s IFAs in Bishops Stortford can help you find the right mortgage for your next move into the housing market.

Your home could be at risk if you do not keep up the payments. 


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