| The Mortgage Guarantee Scheme is now permanently available across the UK | Lenders are insured against losses, supporting availability of high LTV mortgages | When borrowing at higher loan-to-value levels, it’s important to tread carefully |
The government’s Mortgage Guarantee Scheme is now a permanent feature, following its inclusion in Labour’s election manifesto.
The scheme supports the availability of 91% to 95% loan-to-value mortgages by offering lenders a government-backed guarantee to cover part of their potential losses. It is open to both FTBs and home movers across the UK. Announcing the move, the Treasury acknowledged the challenges facing aspiring homeowners, particularly the difficulty of raising a sufficient deposit.
An earlier version of the scheme, introduced in 2021, supported around 53,250 mortgage completions before its expiry in 2024, the majority of these (86%) being FTBs.
Balancing opportunity and risk
The scheme applies in England, Wales, Scotland and Northern Ireland, with only minor adjustments to terminology. While higher loan-to-value borrowing can provide an important route onto the housing ladder, it also carries greater risk if property prices fall. Taking advice before committing is essential to ensure you choose a deal that balances rate, fees and suitability for your circumstances.
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for guidance only. Some rules may vary in different parts of the UK.
