Bad credit? We’ve got your back. We’re the experts who turn “no” into “home”. Explore everything you need to make homeownership happen, regardless of your credit history.
View allSelf-employed? No problem. We’re specialists in making mortgages work for you. Here’s everything you need to tackle the mortgage maze, without the usual hassle.
View allGot a unique situation? We’ve got you covered. As specialist mortgage experts, we cut through the noise to get you what you need. Find your path to homeownership here.
View allRemortgaging doesn’t have to be a headache. We’re the experts who get it done. Find straightforward advice to remortgage with confidence, no matter your circumstances.
View allYour go-to hub for all the other need-to-know mortgage information. From guides to FAQs, we’ve got the answers, no matter your situation.
View allGetting a Joint Mortgage When One Applicant Has Bad Credit
If you’re a first-time buyer or home mover, the Deposit Unlock Scheme could provide you with the keys to a brand new home with just a 5% deposit.
No impact on your credit score
Author: Michael Whitehead Head of Content
6 mins
Updated: Nov 29 2024
Author: Michael Whitehead Head of Content
6 mins
Updated: Nov 29 2024
On this page
Please be aware that by following any external links you are leaving the Haysto website. Please note Haysto nor HL Partnership Limited are responsible for the accuracy of the information contained within external websites accessible from this page.
On this page
If you’ve always dreamt of buying a new-build home but felt they were out of your reach, the Deposit Unlock Scheme could be the solution you’re looking for.
Launched in June 2021, the Deposit Unlock Scheme offers first-time buyers and home movers the opportunity to buy a new-build house or flat with as little as a 5% deposit and borrow the remaining amount using a 95% loan-to-value mortgage.
The scheme was developed as a collaboration between several Home Builders Federation (HBF) trade body members and Reinsurance firm Gallagher Re. It was initially created as a private-sector mortgage guarantee scheme to replace the government’s Help-To-Buy initiative, which is no longer available in England or Scotland.
Traditionally, mortgage lenders ask for a higher deposit on new-build properties (typically 15%- 25%) to cover the premium on the purchase price for newly built homes and avoid plunging buyers into a negative equity situation or leaving lenders unable to recoup their losses in the event of a repossession.
With the Deposit Unlock Scheme, participating home builders use a portion of the sale proceeds from each property to pay for mortgage indemnity protection, backed by Gallagher Re, which covers any possible losses and reduces the risk for mortgage lenders offering such high loan-to-values.
The perceived increased risk that usually accompanies buying a new-build home can also often mean the mortgage interest rates available from lenders are less competitive. However, the insurance cover provided through the Deposit Unlock Scheme also encourages mortgage lenders to offer more attractive rates.
The Deposit Unlock Scheme is available to both first-time buyers and current homeowners looking to buy a new-build property with at least a 5% deposit available for a mortgage (you can put down a higher deposit if you wish)
The other eligibility criteria are as follows:
The property you buy must be a new-build house or flat with at least two bedrooms, to be used as your primary residence and valued below £750,000
The scheme cannot be used for buy-to-let investment properties, studios or one-bedroom apartments
You must purchase a property from a participating home builder (see below)
In addition, you’ll need to pass the lender’s mortgage affordability assessment and standard lending criteria. To find out more about this, read our guide: What Mortgage Lenders Look For In Applicants.
The following mortgage lenders are currently participating in the Deposit Unlock Scheme, with many more expected to join:
Nationwide Building Society
Accord Mortgages
Perenna Bank Plc
Bluestone Mortgages
Each lender has its own rules and eligibility criteria, which will vary. For this reason, it’s recommended that you speak with a mortgage broker (like us!) before approaching a lender directly.
Your mortgage broker will be able to advise you on which lender offers the better chance of success based on your personal circumstances. If you make an enquiry, one of our Mortgage Experts will contact you to get started.
If you’re ready to buy a new home using Deposit Unlock, the process is as follows:
Before you start looking at properties, it’s a good idea to know how much you might be able to borrow. Applying for a decision-in-principle doesn’t guarantee your mortgage, but it does provide you with a figure of how much you could borrow and a basis for the property values you can then search for.
The Deposit Unlock Scheme is only available through participating developers. The choice is pretty broad, with over 80 home builders available, including well-known names such as Barratt Homes, Persimmon, Davidson Group, Taylor Wimpey and Redrow.
You can see the complete list of developers on the Home Builders Federation’s* dedicated website page.
Once you’ve decided on a property you’d like to buy, ask the developer for a confirmation letter verifying that the house or flat is available through the Deposit Unlock Scheme.
At this stage, you now need to secure the 95% loan-to-value mortgage required to buy your new home. This is where we can help!
Our team of Mortgage Experts can help guide you through the mortgage application process from start to finish, including choosing the participating lender most suited to offering the approval you need based on your personal situation.
Both the Deposit Unlock Scheme and the Mortgage Guarantee Scheme provide prospective buyers with the chance to purchase their first or next home with just a 5% deposit and a 95% mortgage.
For Deposit Unlock, the lender's risk is covered through Gallagher Re’s indemnity insurance, which is paid for by participating house builders, whereas the government covers this for the mortgage guarantee scheme.
Under the mortgage guarantee scheme, you can buy both newly built and existing properties. For Deposit Unlock, you can only buy new-build homes. Also, more participating mortgage lenders are currently available for the mortgage guarantee scheme. However, the list for Deposit Unlock is expected to grow significantly as the scheme progresses.
Yes, it’s possible, but it could be more difficult than for someone with a good or perfect credit score. It depends on the type of bad credit issue you’ve had, how long ago it happened and the amount involved.
Choosing the right mortgage lender could also make a big difference, particularly as only a select group of lenders currently participate in the Deposit Unlock Scheme.
Both Bluestone Mortgages and Perenna have a strong track record of helping people with bad credit scores and assess applications on a case-by-case basis. These lenders are available only through a mortgage broker, and both already have great working relationships with us!
The Deposit Unlock Scheme offers an outstanding opportunity for someone with a low deposit to achieve something they never thought was possible—buying a brand-new home!
However, borrowing such a high loan-to-value isn’t without its risks, which makes finding the right mortgage deal - from a limited group of lenders - all the more important.
If you make an enquiry, one of our fully qualified Mortgage Experts will be able to find you the most competitive mortgage rates from among all the participating lenders to suit your requirements.
Each of our customers gets four members of our dedicated mortgage team working on their case. We’re with you every step of the journey and will ensure the application process is as seamless as possible.
We Make Mortgages Possible
Our Mortgage Experts are fully qualified with experience in bad credit, self-employed and complex mortgages. They have a proven track record of getting mortgages for people who’ve been rejected elsewhere.
Get Started NowWe make mortgages possible. Bad credit? Self-employed? Complex situation? No problem. You’re in the right place. We get it, and we can help.
Try it FREE for 30 days, then £14.99 a month - cancel online anytime.
Information
Tools & Guides
Haysto Ltd is an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Registered Office: Haysto, Crystal House, 24 Cattle Market Street, Norwich, NR1 3DY. Registered in England and Wales No. 12527065
The guidance and/or information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Talk to our Mortgage Experts to find out your options