If they wait for more lenders to sign up, or take the time to save for a bigger deposit, they could secure a cheaper mortgage deal and save thousands of pounds in interest payments.
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The UK Government's mortgage guarantee scheme was launched earlier this month, ahead of the previously scheduled start date of January 2014, and is applicable across the whole of the UK. It is the second phase of Help to Buy, following an England-only shared equity scheme in launched April, and a Scottish scheme in September.
The guarantee scheme is intended to help people buy a property if they have only a 5% deposit. It allows people to borrow 95% of the property value, but the Government then guarantees 15% of the loan, so giving the lender greater security and the borrower access to cheaper rates
Confusingly, it is separate from the Help to Buy (Scotland) initiative launched only a month ago, five months after the English version, and it is a shared-equity scheme while the Scottish Government takes a stake of up to 20% of the home.
The borrower must put down a minimum deposit of 5% and arrange a mortgage to cover the remaining 75% of the cost of the property. There is no interest paid on the government's stake. The scheme is only available on new build properties from participating builders and on homes worth up to a maximum of £400,000.
The shared-equity scheme is in its early stages, but meanwhile demand for the mortgage guarantee scheme has taken off.
The RBS group received 206,000 website hits over the first four working days - an increase of more than 200%. The banking group also took 10,000 calls on mortgages over the same period, almost double the usual amount.
You are eligible for the scheme as long as the purchase price of the home is £600,000 or less. The property can be a new build or an existing home and should be your main residence. You don't have to be a first-time buyer and there is no limit on income. However, it cannot be a shared-ownership or shared-equity purchase.
Central Government has put £12 billion into the scheme and most of the big lenders have agreed to participate. But so far only Bank of Scotland and Royal Bank of Scotland have released details of their mortgage rates. BoS is offering a two-year fixed rate at 5.19% with a £995 fee. RBS has a cheaper two-year fix at 4.99% with no fee. RBS also offers a five-year fix at 5.49%. The best rate currently available through a standard mortgage at 95% is Newcastle's two-year fix at 5.95%, plus a £195 fee.
The new deals might undercut the existing rates for 95% mortgages, but borrowers with a small deposit still pay a premium for a mortgage with a high loan to value. David Hollingworth of broker L&C Mortgages says: "The scheme can help people who are struggling to save up for a large deposit, or who don't have parents who can help.
"But if you can find even a 10% deposit, you can get a much cheaper standard mortgage."
Skipton building society, for example, has a two-year fix with no fee at 3.99%, if you can put down a 10% deposit. The monthly payments on a £150,000 loan over 25 years would be £791 with Skipton, compared to £876 on the RBS Help to Buy rate of 4.99%, saving £85 a month, or £2040 over the term of the fix.
Rates on 95% deals might also come down as more lenders release details of their mortgages under the guarantee scheme. David Carmichael, a director of Taylor Carmichael Financial Services in Glasgow, says: "With reports of lenders of the stature of Santander, Virgin Money and HSBC preparing to launch 95% guarantee-backed products in January, there is an expectation that borrowers will be offered competitive products and the scheme will kick-start a very genuine option for long-suffering first-time buyers and home movers with a small deposit.
"It will be the first quarter of 2014 before a true judgement can be made on the rates being offered to borrowers, but with RBS branches in particular reporting a huge amount of enquiries, there is little doubt the demand exists."
Banks and building societies not participating in the scheme might also cut rates in order to compete. Clydesdale Bank, for example, chopped the rate on its three-year fixed-rate deal for first-time buyers from 5.49% to 4.99%, with no arrangement fee.
Remember too that your application for a mortgage under the scheme will not necessarily be successful. Mr Hollingworth says: "There has been a lot of interest in the mortgages, but the credit scores for 95% home loans are rigorous, so not everyone will be accepted."
RBS, for example, must be satisfied that you could meet the repayments on your mortgage if interest rates were to rise to 7%. Then there's the risk of negative equity. If you put down only a small deposit and house prices fall sharply, you could find your mortgage is bigger than the value of your home.