A number of important banks and building societies have agreed to match the government's contribution to the Homebuy loan initiative intended to help more people get on to the property ladder.
Talks between the Treasury, the Office of the Deputy Prime Minister and the Council of Mortgage Lenders led to yesterday's announcement, in which the financial institutions agreed to match the government's £500 million contribution, bringing the scheme to a total worth of £1 billion.
The Homebuy plan sees a potential buyer given a 75 per cent mortgage at the current rate - often paying 5.75 per cent interest, or less - with the final quarter supplied by a zero interest loan.
That quarter has until now been met by the government, but the banks and building societies have now agreed to match their offer.
Peter Williams, deputy director general of the Council of Mortgage Lenders, told the Guardian that a number of "significant" players had signed up, saying a "broad agreement" had been reached to offer an essentially interest-free mortgage, "although there might be a small charge."
The expanded plan should see 20,000 people helped on to the property ladder with the Homebuy scheme.Click here to find out more about mortgages.
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