There appears to be no news yet on exact details of the new mortgage guarantee scheme, which will replace the one ending on June 30 – four weeks from now.

In February this year, the government revealed it was launching a “new, permanent, comprehensive mortgage guarantee scheme that will open the door to homeownership for more young families and hardworking renters”. Details would be announced “in due course” but so far, these have not been revealed. 

Matthew Pennycook, housing minister, said at the end of last week: “The affordability challenges facing first-time buyers mean that we now have a generation locked out of homeownership. This government is determined to change that, ensuring that young families and hardworking renters can buy a home of their own.”

His comments came in response to the release of figures for the existing Mortgage Guarantee Scheme, showing that from April 2021 to the end of 2024, it helped complete 53,261 mortgages. The total value of mortgages supported by the scheme is just over £10.7 billion.

The significant majority of completed mortgages – 86% – were for first time buyers. 

The Mortgage Guarantee Scheme launched on April 19 2021 and is only open to new accounts across the UK until later this month, June 30. 

The current scheme involves the government offering lenders the option to purchase a guarantee on mortgage loans if a borrower has a deposit of less than 10%. The scheme can be used for mortgages on both new build and existing homes, and by first-time buyers, home movers and those remortgaging. The scheme is not available on buy-to-let mortgages or second homes, and the property value must be £600,000 or less. 

For lenders, the current scheme applies down to 80% of the purchase value of the guaranteed property covering 95% of these net losses. The lender retains a 5% risk in the portion of losses covered by the guarantee. This ensures that the lender retains some risk in every mortgage originated.