Many people are unable to purchase a home or move house because of the large deposits required in today’s difficult mortgage market. NewBuy aims to encourage higher loan to value (LTV) lending in order to assist those who are struggling to save large sums for a deposit
NewBuy is a Government initiative developed jointly by the Home Builders Federation (HBF) and the Council of Mortgage Lenders (CML) which will see the re-introduction of 95% mortgages to the market. The NewBuy scheme is designed to make buying a new home easier by overcoming this deposit gap and means that you could move into a brand new home, even if you only have 5% deposit.
NewBuy is a mortgage indemnity scheme and is aimed at those who already own a home or at first time buyers who only have funds for a 5% deposit. Home buyers wishing to take advantage of the schemes will need to qualify for a mortgage with a mortgage lender in the usual way and be subject to the lender’s normal assessment criteria.
NewBuy covers full home ownership only, so it is are not available for Shared Ownership purchases. NewBuy is available for the purchase of a person’s primary home only, so it is not available to help purchase a second home or investment or buy-to-let property.
How does NewBuy work?
NewBuy acts as a 'Mortgage Indemnity' and provides additional security for lender in the unfortunate event that a homeowner defaults on their mortgage and the home has to be repossessed. Under the NewBuy scheme the house builder and the Government will put aside a proportion of the property value into an indemnity fund.
Who is eligible for NewBuy?
NewBuy is available to both first time buyers and current home owners who would like to purchase a new home. In addition, the following criteria will apply:
►The home purchased must be your primary home. You cannot use NewBuy to purchase a second home or a buy-to-let property
►The home purchased must not exceed £500,000 in value
►NewBuy is available to UK citizens and those with indefinite leave to remain
►NewBuy covers outright purchase only, you cannot use NewBuy to purchase a Shared Ownership or a Shared Equity property
►You must not be receiving help with your deposit from a local authority or other public body
NewBuy is available on selected Orbit Homes developments now