Accord Mortgages joins Nationwide Building Society to offer Deposit Unlock mortgage scheme
Accord Mortgages has started offering Deposit Unlock, a new scheme designed to help first-time buyers and home movers buy a new build home with a 5% deposit.
To access the scheme you can only buy a home from a house builder participating in Deposit Unlock (see a list below) and using a mortgage offered by a participating lender. They are currently being provided by Newcastle Building Society and Nationwide Building Society.
From Wednesday 3 August, Accord Mortgages, the broker-only lender, will offer an exclusive range of mortgages through the insurance-backed scheme, which has been developed by the Home Builders Federation, lenders and builders and is being managed by reinsurance broker Gallagher Re.
Accord's Deposit Unlock product range is available to borrowers purchasing a new build house – not just first-time buyers - with a maximum borrowing limit of £600,000. The lender's standard lending policy and affordability criteria must also be met, and loan-to-income is capped at 4.49 times salary.
Stewart Baseley, executive chairman of House Builders Federation, said: "Deposit Unlock provides a real option for buyers, many of whom would otherwise struggle to save the deposit required to secure a new home. In turn, the certainty of demand the scheme will provide allows builders to invest confidently in new sites, deliver the homes the country needs and create jobs and investment in economies across the country. With the Help to Buy scheme about to close, we developed Deposit Unlock to provide an alternative option for buyers. Accord's entry will help the scheme grow and help more buyers realise their ambition of purchasing a new build home."
How does Deposit Unlock work?
The Homeowners Alliance website highlights that mortgage lenders are often stricter on the amount they are willing to lend on the purchase of new builds. This is to protect themselves from the devaluation of the property in the early years and other risk factors. As such, they often set the minimum deposit for new build properties at 15% or even 25%.
It says: "Deposit Unlock gets around that and allows you to buy a new build with just a 5% deposit. With Deposit Unlock, the house builders pay to insure the mortgages instead. And they use some of the money from selling the homes for this purpose; the aim is to make lenders more comfortable offering high loan-to-value mortgages on new builds.
"This scheme is exclusively for new build homes, and the maximum loan you can take out to buy a property through this scheme is currently £750,000. Although this depends on the lender and your circumstances."
Which home builders are signed up to Deposit Unlock?
To be eligible, you'll need to find a new build home offered under the Deposit Unlock scheme with one of the following participating home builders:
Barratt, Bell way, Bewley, Bloor Homes, Countryside Properties, Crest Nicholson, Croudace, Davidson Group, Fairview Hill, Persimmon, Redrow, Taylor Wimpey and Vistry.
Call Trinity Financial on 020 7016 0790 to secure a Deposit Unlock mortgage or book a consultation
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