What help is available for first time buyers?

Brian McCarthy tells us about the various financial schemes available to help first time buyers.

The situation for first time buyers with small deposits has improved markedly over the last few months mostly due to various initiatives introduced by financial institutions and the UK and Scottish governments.

90% mortgages are available!

There has been a general increase in lenders prepared to offer mortgages with 10% deposits and there are also a very limited number available with 5% deposits. Interest rates have reduced from the very high levels being charged in the past making repayments more affordable for many.

First time buyers

Innovative mortgage products

In addition lenders have become more innovative with products available. For example, there is the potential for family members to help with the deposit, by placing cash with the lender up to 10% of the purchase price. This sum requires to be left with the lender for three years but a competitive rate of interest is credited and the funds are returned after three years enabling parents to assist other children or grandchildren in the same way in the future.

help to buyHelp to Buy schemes

The biggest impetus however has been the introduction of the Help to Buy schemes in Scotland. Whilst not exclusively for first time buyers they offer a good opportunity to get on the property ladder.

Help to Buy: mortgage guarantee scheme

The Help to Buy: mortgage guarantee scheme is available for the purchase of new build or existing properties up to a maximum purchase price of £600,000. A deposit of at least 5% is required and the government provides a guarantee to the lender for the next 15% of the mortgage.

A number of lenders are currently providing mortgage finance under this arrangement subject to normal lending criteria such as affordability and credit checks so it is imperative to obtain independent financial advice on the options available and to ensure a mortgage would be available before progressing further.

Help to Buy (Scotland): equity loan scheme

Help to Buy (Scotland): equity loan scheme is in respect of new build property only. Buyers with just a 5% deposit can purchase a property to a maximum purchase price of £400,000. The Scottish government will assist by taking a 20% equity stake in the property. Most major builders are participating in the scheme.

MI New Home

Alternatively, the MI New Home scheme will enable credit-worthy borrowers to access 90 to 95% loan to value mortgages from participating lenders to buy new build homes in Scotland, with a maximum sales price of £250,000. A guarantee will be provided by the Scottish government.

Want to know more?


Brian McCarthyBrian McCarthy is a Financial Planning Consultant who aims to help those who need help finding mortgage solutions. He works with clients to find the mortgage that best meets thir individual needs. You can call him on 07956 969 859 for more information.

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The initial consultation with an adviser is free and without obligation. Thereafter, ESPC Mortgages charges for mortgage advice are usually £350 (£295 for first-time buyers). YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS SECURED AGAINST IT.