A Nationwide Building Society mortgage is available with a low 5 per cent deposit.

Three high street lenders are offering 95 per cent deals, for example a Nationwide Building Society mortgage is available for home buyers with just a 5 percent deposit. The deals are part of the NewBuy guarantee scheme which is the first ever indemnity scheme to be backed by a government guarantee.

Launched with the intention of bringing first-time buyers into the housing market, the government hopes that the NewBuy guarantee scheme will stimulate the economy and help building industry.

Under the new scheme, a deposit of 3.5 per cent of a property’s value will be provided by house builders, with the government offering an additional guarantee of 5.5 per cent so that lenders will be protected against possible losses if house prices fall.

The scheme, aims to help around 100,000 home buyers to purchase new-build properties up to the value of £500,000 with only five per cent of the value as deposit.

The new deals in the market include the Nationwide Building Society mortgage, together with other deals from Barclays and NatWest, with other banks and building societies such as Halifax starting to offer mortgage deals through the scheme in April. It has been suggested Santander will join the scheme later in the year.

One limiting factor of the schemes is that deals are only available to people buying through certain house builders, with each of lenders having different criteria. They have similar but slightly varied lists, so there is still competition between them where lists overlap, for example the Nationwide Building Society Mortgage will only be available for properties built by Barratt, Bellway, Bovis, Persimmon, Redrow and Taylor Wimpey, alternative deals are also available for these and other builders properties.

If you are a first time buyer looking at new build properties, contact us at Deal Direct where we can advise you which deals may be available to you and find you the best interest rates available.