Government support for homebuyers with a small deposit has prompted a flurry of enticing offers. But buyers should go in with their eyes wide open
It was billed as a way to give prospective homeowners access to the housing market. When the chancellor Rishi Sunak announced a mortgage guarantee scheme to encourage banks and building societies to lend to people who can only afford a 5% home deposit, he heralded it as a way of turning “generation rent to generation buy”.
The move, launched last week, has prompted a flurry of new mortgage products on to the market, both within and outside the scheme. But buyers have been warned that they may be paying a higher interest rate for the new loans than if they would if they had a bigger deposit.
