New £5,000 Deposit Scheme for First-Time Buyers

A new scheme is being introduced for people buying their first home. Now, you can borrow up to 99% of a home’s price, meaning you might only need a £5,000 deposit to buy a house worth up to £500,000. This will make it easier for many to get onto the property ladder, especially if they’ve found it hard to save for a larger deposit.

What’s This Scheme About?

The Scheme is offering this deal to help first-time buyers across England, Scotland, and Wales. You just need a 1% deposit to start – that’s £5,000 for homes up to half a million pounds. It’s aimed at helping those without family support to buy their own place.

Who Can Apply?

Only first-time buyers can apply. If you have at least £5,000 for a deposit, you could get a five-year fixed mortgage at a 5.99% rate, slightly above the current average rate of 5.34%. However, the mortgage won’t work for buying new builds, flats, and comes with thorough credit and affordability checks. You must also be under 70 years old by the time the mortgage ends.

What are the Risks?

If you’re borrowing a lot, it’s wise to try and pay back more when you can. This helps you own more of your home outright and reduces the risk if house prices fall. If house prices drop, you could owe more than your house is worth (negative equity), making it tough to sell or switch your mortgage.

Loan-to-Value Ratio

If your house value is £250,000 and you have a deposit of £50,000, you would need a mortgage of £200,000.

LTV Calculation:

Mortgage ÷ Value

(200,000 ÷ 250,000) = 0.8

Result x 100 

(0.8 x 100) = 80

This gives you an 80% loan-to-value ratio.

If you would like to speak to our mortgage adviser just contact us: info@bayzos.co.uk or 0330 124 6533 

Thank you for reading 

Gary

Disclaimer: your home or property may be repossessed if you do not keep up repayments on your mortage