Are you looking to buy a property but are struggling to get over the first hurdle of saving enough for a deposit? Whether you’re a first-time buyer or existing homeowner, the Deposit Unlock scheme could be just the solution for you, enabling you to purchase a new build property with just a 5% deposit.
What is Deposit Unlock?
Launched by the Home Builders Federation in collaboration with lenders, Deposit Unlock is a scheme designed to help you buy a new build home with a 5% deposit. First-time buyers and existing homeowners can benefit from the Deposit Unlock scheme, boasting competitive mortgage rates for properties valued up to £750,000.
✔ Available to first-time buyers and existing homeowners
✔ Requirement of a 5% deposit
✔ Access to competitive mortgage rates
✔ Available on new build homes only
✔ No restrictions on location, lender approval permitting
How does the Deposit Unlock mortgage scheme work?
The idea of the Deposit Unlock scheme is to make buying a house more affordable and accessible. It works by offering participating lenders protection on their mortgages, so that they can let you borrow 95% on new build properties.
The house builders pay to insure the mortgage, allocating some of the money earned through selling the homes themselves.
Which home builders are participating in the Deposit Unlock scheme?
To benefit from Deposit Unlock, you’ll need to find a new build home under the scheme with a participating home builder. This includes the following:
| Anderson | Davidsons Homes | Morris Homes |
| Ashberry Homes | David Wilson Homes | Nicholas King Homes |
| Barratt Homes | Devine Homes | Norfolk Homes |
| Barratt London | Edenstone Homes | Pat Munro Homes |
| Bellway | Fairview Homes | Persimmon Homes |
| Bellway London | Gleeson Homes | Prospect Homes |
| Bewley Homes | Hayfield Homes | Redrow |
| Bloor Homes | The Hill Group | St Modwen Homes |
| Bovis Homes | Ilke Homes | Stonebridge |
| City & Country | Keepmoat Homes | Taylor Wimpey |
| Countryside Properties | Linden Homes | Thakeham |
| Crest Nicholson | Mandale Homes | Vistry |
| Croudace Group | Miller Homes | Wheeldon |
More developers are expected to join soon!
Which lenders, banks, and building societies are taking part in Deposit Unlock?
Running since November 2021, the Deposit Unlock scheme is currently offered by multiple banks and building societies, including Accord Mortgages, Bluestone, Nationwide, and Perenna. More lenders are expected to join soon. Learn more about Deposit Unlock lenders.
Who is eligible for Deposit Unlock?
Reiterating what’s already been said, the Deposit Unlock scheme is available to any home buyer looking to purchase a new build property for residential purposes. Just note that you can’t use Deposit Unlock if the property is for buy-to-let investments or if it isn’t going to be your main residence.
Are there any restrictions on the new build property you can purchase with Deposit Unlock?
There are some minor restrictions to be aware of when purchasing a property with Deposit Unlock. For example, you can buy any new build house or two-bedroom flats, however, you cannot buy studios or one-bedroom flats.
Why did Deposit Unlock launch?
The Deposit Unlock scheme was launched to help home buyers purchase the new build property of their choice without hefty deposits. Saving up enough money for a down payment on a house or flat can be challenging, arguably the most difficult part of home-buying!
And since the Help to Buy scheme came to a close in October 2022, Deposit Unlock acts as a great alternative. The key difference between the two schemes is that the Help to Buy offered a 5% deposit along with a government-funded equity loan, whereas Deposit Unlock doesn’t offer the added loan. Yet, most importantly, Help to Buy was only available to first-time home buyers, and Deposit Unlock is available to all buyers.
Key differences between Deposit Unlock and Help to Buy
| Deposit Unlock | Help to Buy | |
| Available to first-time buyers | ✔ | ✔ |
| Available to existing buyers | ✔ | ✖ |
| Government 20% equity loan | ✖ | ✔ |
| Buy a property with 5% deposit | ✔ | ✔ |
| Interest-free loan for the first five years | ✖ | ✔ |
| Mortgage for only 75% of your property value | ✖ | ✔ |
| Maximum property value of £186,100-£600,000, depending on location | ✖ | ✔ |
| Maximum property value of £750,000 with no location restrictions | ✔ | ✖ |
Is Deposit Unlock similar to the 95% mortgage guarantee scheme?
While Deposit Unlock and the 95% mortgage guarantee scheme share similarities, there are also some differences. Similar to Deposit Unlock, the 95% mortgage scheme enables you to buy a property with a 5% deposit. However, with this scheme, the lender pays the government to provide the guarantee. For Deposit Unlock, it’s the house builder that pays an insurer to provide the guarantee.
Unlike Deposit Unlock, the 95% mortgage guarantee scheme is available for new build and existing properties but it is due to end in June 2025.
Are there any alternatives to Deposit Unlock?
Doesn’t sound right for you? There are numerous schemes available to help make the home-buying process easier. Explore your options below:
- Shared Ownership
- First Homes
- Rate Reducer
- Affordable Housing
There are a few things to consider before opting into the Deposit Unlock scheme, notably that a 5% deposit means a 95% mortgage, which comes with higher monthly payments and potentially higher interest rates. Make sure to do your research and find the right scheme for you.
Ready to explore the market? Check out thousands of new build properties for sale in the UK and discover the home of your dreams.
