What Government Schemes Are
Available for Mortgage Applicants?

What Government Schemes Are Available?

The UK government offers several initiatives to support mortgage applicants, particularly first-time buyers and those looking to build or purchase a new home. Here’s a quick overview of some of the current schemes:

• Help to Buy Equity Loan: Previously available for first-time buyers to boost their deposit, this scheme is no longer open for new applicants in England but remains active in Wales until 2025.

• Mortgage Guarantee Scheme: Available until June 2025, the government guarantees 15% of the mortgage for applicants with a 5% deposit, encouraging lenders to offer higher loan-to-value ratios.

• Help to Build Equity Loan: For those looking to build their home, this provides a government loan between 5% and 20% of the costs, including land and construction.

• First Home Scheme: First-time buyers can get a discount of up to 30% on new-build properties under this scheme, making it easier to step onto the property ladder.

• Shared Ownership: Applicants can buy a share of a property (from 25% to 75%) and pay rent on the remaining portion. You can gradually increase your share of the property over time.

• Right to Buy: Tenants who have lived in council homes for more than three years may be able to purchase their home at a discounted rate.

Other Eligibility Factors

Besides the specific criteria of each scheme, lenders will assess applicants on other factors such as income, credit history, and property type. Meeting these requirements is crucial for securing approval.

Which Scheme Should You Choose?

Choosing the right scheme depends on your unique circumstances. Consider the following questions:

• Are you a first-time buyer?

• Do you need help raising a bigger deposit or prefer lower monthly repayments?

• Are you buying a new build or living in a council property?

How a Broker Can Help You Select the Right Option

A specialist mortgage broker can save you time and effort by identifying the best scheme for your needs. They’ll also provide guidance on both the government application and the lender’s mortgage process, ensuring you meet all the requirements and paperwork involved.

Lifetime Individual Savings Account (LISA)

The LISA is a savings plan aimed at helping first-time buyers save for a deposit or individuals saving for retirement. You can save up to £4,000 per year, and the government will contribute an additional 25%, up to £1,000 per year.

Is There Government Support for People Who Can’t Pay Their Mortgage?

Yes, there are various forms of government support for homeowners struggling to meet their mortgage repayments:

• Mortgage Rescue Scheme (Wales): Local authorities can purchase part or all of a home to reduce repayments or allow the owner to stay as a tenant.

• Home Owners' Support Fund (Scotland): This includes the Mortgage Rent Scheme and Mortgage to Shared Equity Scheme, providing alternative solutions for struggling homeowners.

• Support for Mortgage Interest: Eligible homeowners can take out a loan to help cover interest payments on their mortgage, which is repaid when the property is sold or transferred.

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