Help to buy 5% question

Rw21 · 6 August 2020 at 7:18AM

Hi,

Sorry if this has been asked before (I’m sure it probably has).

I understand that 5% mortgages are hard to come by with everything that is going on and wanted to ask whether this applies to to the HTB equity loan scheme. Do lenders actually want to see a deposit of more than 5% (+the gov loan).

i originally assumed not given that you are only asking for a 75% mortgage technically. Is that right?

My partner and I are looking to buy with the scheme but only have 5% deposit. The 75% mortgage would be less than 4x our salaries so we’re hoping that puts us in a better position.

Grateful for any advice.

Thanks

haras_n0sirrah · 6 August 2020 at 7:21AM

Help to buy with a 5% deposit is available as is shared ownership. It is just open market where it isn't currently possible to get a 95% mortgage

GixerKate · 6 August 2020 at 12:47PM

The H2B loan counts as part of your deposit.

broga020 · 6 August 2020 at 4:32PM

Basically the bank considers your 5% and the HTB amount as your total deposit, so yeah you end up with a 25% deposit from their view. The HTB part isn’t released to you and instead goes to the builder directly, so instead you show your Authority to Proceed that HTB give you to the mortgage provider instead. So although you yourself have a 5% deposit, in total you actually have a 25% deposit as far as the lender is concerned.