The scheme aims to support low-deposit lending as Help to Buy ends
A new scheme designed to make 95% mortgages more accessible to people buying new homes will be launched in the new year.
Initially available in the North East and Yorkshire, Own New said it will soon expand nationwide, making its 95% mortgage product available to more first-time buyers and home movers buying new homes.
Own New was designed by Market Mortgage to help homebuyers who can afford repayments, but don’t have a ‘bank of mum and dad’ or other source to lean on for a deposit. The scheme aims to create better mortgages for new builds and make them available to a broader range of people.
Own New said it works with lenders to reduce the risk involved in high loan-to-value lending, meaning they can lend to borrowers with a small deposit at competitive rates. The scheme is funded by housebuilders, who pay a small fee on completion of the sale. There is no cost to the homebuyer.
“The launch of our first 95% mortgage product comes as Help to Buy has closed applications and the market is emerging from a difficult period,” Eliot Darcy (pictured), founder of Market Mortgage, said. “Help to Buy has proven that there is a need to support low-deposit lending. Own New will plug the gap it leaves without reliance on taxpayer funding.”
Darcy also announced that Darlington Building Society became the first lender to join Own New, alongside more than 50 housebuilders, offering a route to owning a new home for buyers with low deposits.
“Darlington’s focus on manual underwriting means each application will be considered by a person rather than an algorithm,” he said. “This will particularly help people with non-standard circumstances, for example those who are self-employed, have multiple sources of income or who are in the early stages of their career and looking to build a credit rating.
“We look forward to working with Darlington Building Society and more than 50 housebuilders who have joined Own New as we work to create a fairer and more competitive system of mortgage lending.”
Andrew Craddock, chief executive at Darlington Building Society, said the mutual is always looking for creative ways to help people get on to the property ladder, especially now that the Help to Buy scheme is coming to an end.
“As costs for all of us continue to increase, raising large deposits is out of reach for many,” Craddock commented. “Our partnership with Own New is an exciting opportunity for us to combine our award-winning mortgage proposition with their innovative solution for borrowers with low deposits, so we can continue to make homeownership accessible.”
Own New said mortgages will be available with more lenders in the coming months.
