The Government has announced that it will help first-time buyers with 5% deposit mortgages. But what does this mean? We answer the important questions below: Do I have to be a first-time buyer? It is understood the loans will be available to current homeowners as well as first-time buyers, although the former will probably account for the bulk of the scheme's beneficiaries as homeowners can use the equity in their property to remortgage. What Bussey & Armstrong home can I buy using this scheme? It is understood that any property under the value of £600,000 will be eligible for the scheme. This means all our Bussey & Armstrong homes at West Park Garden Village are eligible. How much do I need to earn? At the moment, mortgage lenders will only usually let you borrow 4.5 times your annual salary. This means, to borrow £200,000 you will need to earn a salary of more than £44,500. This total can be met by an individual or by multiple people. Please be aware this is a guide and doesn’t account for other financial agreements you may already have. It is best to contact your preferred mortgage provider for more details. How does this compare to the average deposit? Despite mortgage providers offering mortgages from 10% of the total house price, most first-time buyers put down significantly more. According to Halifax, the average deposit put down by a first-time buyer in 2020 was 23% of the property value. Why does this help? The aim of the scheme is to help people currently renting who meet the 4.5 times loan to income limit but struggle to save after paying rental costs. With the 95% loan, mortgage payments for a 3-bed house will be similar to a current rental cost. This means more buyers can access the market. What will the interest rates and monthly payments be? Unfortunately, we have to wait to see what the rates the banks offer and it will also depend on how much you borrow. It is expected that interest rates in the loans will be higher than current mortgage deals. It is best to talk to your mortgage provider to find out more.
For more information please contact our sales office.