UK 95% Mortgage Guarantee Scheme Ends Soon: What Buyers Need to Know

A UK government scheme designed to support lenders in offering 95% mortgages is due to end this month, with no clear timeline or details yet released about its planned replacement.

The mortgage guarantee scheme was launched in April 2021 to help individuals with small deposits get onto the property ladder. Under the scheme, lenders are able to purchase a government guarantee covering the portion of the mortgage between 80% and 95% of the property’s value. This means that if a borrower falls into financial difficulty and their property is repossessed, the government would compensate the lender for that part of the loss.

While not all lenders offering 95% mortgages opted to use the scheme, it still played a significant role in the market. Between its launch and the end of December 2024, more than 53,000 mortgages were completed using the guarantee, with 86% of these being purchases by first-time buyers.

Back in February, the government announced plans to introduce a “new, permanent, comprehensive mortgage guarantee scheme” aimed at expanding homeownership opportunities for young families and hardworking renters. However, as of now, no further details have been provided. The current scheme remains open for new mortgage applications only until 30 June.

Government ministers have emphasized that making the guarantee scheme permanent and more comprehensive would give banks and building societies greater long-term confidence to continue offering low-deposit mortgage products.

Recent data revealed that the total value of guarantees provided under the scheme stands at £1.6 billion, supporting mortgages with a combined value of £10.7 billion. The average value of a property bought or remortgaged through the scheme was approximately £211,000.

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