NewBuy Mortgages

The NewBuy Mortgage Guarantee scheme is a Government initiative, launched in March 2012, which aims to help people in England to buy a new-build home. You may be eligible for the NewBuy scheme provided that you have a deposit of at least 5%. To find the best NewBuy mortgage deals, click on the FREE mortgage tables.

NewBuy mortgages are  intended for borrowers who with a deposit of 5%-10%. NewBuy is available to both first-time buyers and to people who already own a home but are unable to save up a substantial deposit.

What is the Loan-To-Value ratio (LTV)?

The loan to value ratio of a mortgage indicates how much of your property you own outright (covered by your deposit, and commonly known as equity) and the amount you are borrowing (covered by your mortgage), expressed as a percentage. Because they are aimed at first time buyers and people without a large deposit saved up, NewBuy mortgage will usually offer a high LTV or around 85-95%. To compare top mortgage rates and find the best NewBuy mortgage deals for you, use the mortgage calculator to search over 5,000 mortgage deals based on your personal circumstances.

How does a NewBuy mortgage work?

• NewBuy is available in England on all new properties offered by home builders participating in the scheme, up to and including a sale price of £500,000.
• Most major and many smaller home building companies have now registered with NewBuy, or are in the process of registering, but check with the building company before you apply for a NewBuy mortgage.
• New home buyers wishing to take advantage of the scheme will need to qualify for a mortgage with a mortgage lender in the usual way and be subject to the lender’s normal assessment criteria.

If you apply for a NewBuy mortgage, lenders will consider criteria such as:

• Your earnings  – Do you earn enough to borrow the amount you want?
• The stability of your income  – Are you self-employed or new in a job?
• Your outstanding debts – How much debt do you have?
• Your credit rating  – Have you ever missed a mortgage payment or other repayment in the past? Do you have any County Court Judgments (CCJs) against you? Have you even been bankrupt?
• Your eligibility for the NewBuy scheme – if you apply for a mortgage under the NewBuy scheme you will be required to fulfill certain additional criteria specific to this scheme.

How much will a NewBuy mortgage cost?

A high loan to value (LTV) mortgage, such as a NewBuy mortgage, will generally be more expensive than mortgages with lower LTVs as the bank is taking on more risk due to the greater amount owed.