Mortgage Pathways to play key role in trial of Deposit Unlock scheme

Published: 22nd June 2021

We are pleased to announce that we are taking part in an exciting pilot for 95% mortgages on new build homes, as part of the newly-launched Deposit Unlock mortgage indemnity scheme.

Developed by the Home Builders Federation (HBF) and its members, and administered by reinsurance broker Gallagher Re, Deposit Unlock is currently in its soft launch phase. The North East of England has been selected as the first region in the UK to trial the scheme, with Newcastle Building Society being the first lender to launch the 95% mortgages to new build home buyers.

This means that at Mortgage Pathways, we will play an important role in the trial as the key link between buyers, the lender and the housebuilder – advising buyers on the best mortgage product for them and getting them onto or up the property ladder by using the new scheme.

Deposit Unlock will support high loan-to-value (LTV) lending in the new build market, and will see housebuilders use a percentage of income from their sales to pay the cost of insuring mortgages.

In the simplest terms, the lender still lends 95%, but the housebuilder pays for the insurance instead of the lender having to take out the insurance. This should lead to more competitive rates, and provides long-term security beyond the scheduled end of Help to Buy in 2023.

The Deposit Unlock product rates are due to be announced shortly, and there are then plans to roll out the scheme to more lenders nationally.

Mark Finch, our Managing Director, said: “We’re delighted to be among the first mortgage brokers to be involved in the Deposit Unlock scheme, and it’s great that the North East will be the first region to benefit. It’s positive to see more options for both first- and next-time buyers to access low-deposit mortgage products, particularly with the hugely popular Help to Buy scheme due to end in the next couple of years.

“At Mortgage Pathways, we work with some of the UK’s leading housebuilders, advising their customers on the best new build mortgage options – which include exclusive products that are only available to new build advisors like ourselves. The Deposit Unlock scheme has been well-received by all our housebuilder partners, who see it as addressing a crucial missing piece of the new build market.

“We look forward to helping a greater number of low-deposit borrowers to purchase a new build home with only a 5% deposit, firstly in the North East – where are headquarters are – and then also throughout the UK as the scheme develops.”

To find out more about the Deposit Unlock scheme, and for advice on mortgages for new build homes, please get in touch with our expert team.