NewBuy mortgage guarantee scheme and what you need to know.

The NewBuy mortgage guarantee scheme is a Government led initiative where house builders and the Government underwrite 95 % LTV mortgages up to a maximum value of £500,000 for new build property.

Lenders are provided with the guarantee that should house prices drop, they will be covered for the loss. Developers are to pay the mortgage lender 3.5% of the new build purchase price and the government provide an additional 5.5%. By providing lenders with this guarantee the aim is to reduce the risk to lenders offering high LTV deals.

The scheme will apply to new build homes but only if the developer is part of the scheme. It must be a standard property purchase under £500,000 and must be the main home and not a second property. The scheme is not just open to first-time buyers but for anyone with a minimum 5 % deposit..

Various mortgage providers and property developers have signed up to NewBuy mortgage guarantee scheme. Nationwide building society, Barclays and NatWest all have 95 % LTV deals in place. The house builders who have signed up include Linden Homes, Barratt, Bellway, Bovis, Redrow, Persimmon and Taylor Wimpey.

NatWest offer a 2 year fixed deal for 95 % LTV at 4.29 % and a 5 year fixed deal at 4.99 %

Barclays offer a 2 year fixed deal for 95 % LTV at 4.99 % and a 4 year fixed deal at 5.89 %.

Nationwide offer a 3 year fixed deal for 95 % LTV at 5.69 % and a 5 year fixed deal at 5.99 %.

A 5 year fix may be a safer bet than a 2 year fix as it gives protection from an interest rate rise for longer. The 5 year fixed Newbuy rates which are available from 4.99 are competitively priced.

Deal Direct can help you with your Newbuy mortgage, contact our skilled brokers today and we will negotiate a great deal on your behalf.

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