The NewBuy scheme is designed to help overcome the deposit gap for new home buyers.
It is aimed at first-time buyers and those who already own a home who only have funds for a 5-10% deposit on the home they wish to buy in England. The lenders participating in the scheme will provide a 90-95% loan-to-value mortgage for buyers meeting their qualifying criteria.
The scheme will be operated by the home building industry and mortgage lenders – the banks and building societies – working in partnership with the Government. The scheme is designed to protect the lenders against losses in the unfortunate event of repossession, which is why they are prepared to make 90-95% mortgages available. It is also worth noting that this does not change a borrower’s responsibility to repay the mortgage in any way.