Get on the property ladder with the help of a gifted deposit

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    “We know that time is precious for you, we can work around your availability while searching for the most competitive mortgage products and overseeing your mortgage application from start to finish”.

    Jonathan Smith – (CeMAP, BA Hons, Aff SWW, CeRER)

    What is Deposit Unlock?

    This scheme helps first-time buyers to get on the property ladder and existing homeowners to move up it. It does this by enabling the purchase of a new-build home with just a 5% deposit.

    Maximum loans are available via the scheme for £750,000. The 95% mortgages offered have competitive interest rates to ensure that buying a new-build home is affordable. This scheme is possible because of a collaboration between the home building industry and lenders.

    The need for the Deposit Unlock scheme

    A group of developers belonging to the Home Builders Federation (HBF) understood the need for a mortgage guarantee scheme in the private sector to encourage more people to buy new builds. This was because of two issues faced by prospective buyers — lenders’ strict criteria for new build mortgages and restrictions with the government’s Help to Buy: Equity Loan scheme.

    Stricter criteria for new build mortgages

    New builds are often priced higher than similar, older properties, which is called the ‘new build premium’. They can drop in value within the first few years and this increases the risk for lenders. As a result, they have stricter lending criteria for new build mortgages. They also require a higher deposit than for a standard residential mortgage. For example, lenders often stipulate a 15% deposit for new-build houses and a 25% deposit for new-build flats. This makes ownership of a newly built home much harder for many prospective buyers.

    Restrictions with the Help to Buy scheme

    The Help to Buy: Equity Loan scheme enables first-time buyers to borrow an equity loan of up to 20% of the price of a newly built home. Buyers in London can borrow up to 40% of the price. Only a 5% deposit needs to be paid on exchange of contracts. This is a great way for first-time buyers to get on the property ladder. However, the scheme doesn’t help anyone who already owns a property and wants to move to a new home. It also has regional price caps. The lowest of these is £186,100 in the North East while London has the highest cap of £600,000. As well as these restrictions, the scheme is due to end in March 2023.

    An insurance-led solution

    To combat these issues, the HBF teamed up with the reinsurance firm, Gallagher Re. Gallagher Re was commissioned by the HBF to find a solution that could be implemented in the private sector. The outcome was the insurance-led scheme called Deposit Unlock. Under this scheme, mortgage lenders are encouraged to offer 95% mortgages on new builds by being paid mortgage insurance. This is paid to them by the developers each time a home purchase completes, reducing their risk.

    Deposit Unlock enables first-time buyers to continue benefitting from a low-deposit mortgage scheme for new-build properties in the absence of Help to Buy. But unlike Help to Buy, it also allows existing homeowners to benefit too. As well as that, loans can be obtained of up to £750,000, depending on each lender’s terms and borrower’s circumstances. This cooperation between the insurance industry, house builders and lenders, therefore, provides an essential boost to the ownership of new-build homes in the UK.

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    How does Deposit Unlock work?

    The Deposit Unlock scheme allows you to buy a new build from a participating home builder. This must be used as your home, which means you cannot buy a new build as a buy-to-let investment. Deposit Unlock lenders offer 95% mortgages so that you only have to pay a 5% deposit. Their mortgage products differ but all have competitive interest rates to ensure that you benefit from an affordable deal. In return for offering these mortgages, lenders are paid insurance for them by the home builders.

    Under this scheme, the maximum you can borrow is £750,000. However, this depends on your lender’s terms as well as your circumstances. Some lenders offer incentives to help persuade you to take their mortgage deal. These can include a free valuation, cashback or no arrangement fee, for example.

    Get expert advice about buying a new build

    Before making a decision about using Deposit Unlock to buy your new-build home, speak with one of our mortgage brokers. Located in Kent, London and Edinburgh, they can discuss your borrowing requirements and check your circumstances. They can provide you with detailed information about Deposit Unlock as well as the alternatives available, such as shared ownership or the First Homes Scheme.

    At Trinity Finance, we work with specialist new build mortgage lenders and have access to exclusive deals. We can also arrange your new build home insurance and mortgage protection insurance, giving you peace of mind should the unexpected happen. Just give us a call on 01322 907 000 to speak with one of our mortgage experts. If you prefer, send an email to us at or an enquiry via our contact form.


    Deposit Unlock scheme eligibility

    The following criteria have to be met to be eligible for Deposit Unlock:

    • You can apply as a first-time buyer or an existing homeowner.
    • The property you buy must be a new build.
    • The new build must be used as your home.
    • You have to buy your new-build home via a participating home builder.
    • You need to pay a 5% deposit.
    • Your mortgage must be arranged via one of the participating Deposit Unlock lenders.
    • You can borrow up to £750,000.

    The lenders providing mortgages via this scheme have their own eligibility criteria to check your affordability. This includes taking your income and expenditure into account as well as any outstanding debts, your employment status, credit rating and more.

    Considerations before applying for Deposit Unlock

    The new-build properties that can be purchased using this scheme are only available via participating home builders. These home builders are not obliged to offer Deposit Unlock for all of their properties, reducing the selection you can choose from. Likewise, the low-deposit mortgage deals are only available from lenders participating in the scheme. This limits your choices for both the new-build home you can buy and the mortgage deal you can secure.

    We’ve previously mentioned the new build premium. This means that you will pay more than you would for a similar but older property. It also means that your new-build home may drop in value during the first few years after you’ve moved in as it will no longer have its appeal of being brand new. Be sure to weigh up the pros and cons of buying a new build over an older property.

    Alternatives to Deposit Unlock

    Other options are available if you’re unsure as to whether Deposit Unlock is the right choice for you. Our mortgage brokers can discuss these with you so that you can make the best decision to suit your needs and circumstances. Two possibilities to consider are shared ownership and the First Homes Scheme.

    • Shared ownership: With shared ownership, you buy a percentage of the property – usually between 25% and 75% – and pay rent for the remaining share. You can increase your share of your home in the future, which is called staircasing. Just like Deposit Unlock, you can pay a 5% deposit.
    • First Homes Scheme: This scheme is available to first-time buyers in England and provides a discount of at least 30% on the price of new builds. You need to pay at least a 5% deposit and secure a mortgage for at least 50% of the purchase price.

    You may be lucky enough to get help from the Bank of Mum and Dad or a family member who agrees to be a guarantor for your mortgage. If you’re not in a rush to buy, try saving a bigger deposit. That way, you’ll benefit from a lower loan-to-value (LTV) ratio for your mortgage as well as more options and better rates.

    Get financial help when buying a new build using Deposit Unlock

    Buying a new build has many benefits to offer. It’s brand new with little or no maintenance to worry about and you have a blank canvas to put your stamp on. It’s also energy efficient and likely to have been designed with modern living in mind, such as having an open-plan layout, an en suite bathroom, a study and adequate parking. Safety features will be included and your home will possibly include smart technology too. New builds also come with a warranty to protect you against structural defects and issues with the fixtures and fittings.

    However, the premium price tag and strict lending criteria can often put new-build homes out of reach of prospective buyers. This is when Deposit Unlock can help. The low-deposit mortgage scheme provides an affordable way for you to buy a new-build home. You will also benefit from a competitive rate despite securing a mortgage with a high LTV of 95%.

    Give us a call on 01322 907 000 when you’re ready to buy your new-build home. Our mortgage brokers, located in Kent, London and Edinburgh, can advise you on the Deposit Unlock scheme and check your eligibility. They can assess your affordability for a mortgage and help with other aspects of buying a home, such as arranging your new build home insurance and mortgage protection insurance. If it’s out of office hours, send us an email at or an enquiry via our contact form. One of our new build mortgage brokers will reply to you as quickly as possible with more information.

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    Equity Loan Scheme


    No, this scheme is designed to help prospective buyers own a new-build home in an affordable way. Therefore, it’s not possible to buy a new build as a buy-to-let investment using Deposit Unlock.

    The insurance paid by the developer reduces the lender’s risk should you default on the mortgage and the property has to be repossessed. This enables the lender to offer a 95% mortgage, subject to your affordability, at a competitive rate. It doesn’t change your obligation to the lender. If you fail to keep up with your mortgage repayments, you risk your home being repossessed.