The return of the 95% mortgage – what’s available and how much they cost

With the chancellor announcing a government guarantee on 95% mortgages in his Budget, products have started hitting the market. Nicole Garcia Merida looks at what’s on offer.

House for sale signs
The scheme is available on new-build and existing properties up to £600,000
(Image credit: © Nathan Stirk/Getty Images)

As part of his pledge to turn “generation rent into generation buy”, chancellor Rishi Sunak announced a 95% mortgage guarantee in the March budget, due to launch in April. The scheme, designed to encourage lenders to start offering 95% mortgages again after almost every single one was withdrawn due to the pandemic, will see the government partially compensate lenders if homeowners fail to pay their mortgage.

According to Which?, using data from MoneyFacts, the number of 95% mortgages available to buyers fell from 391 at the start of 2020 to just three by the end as lenders sought to protect themselves as the pandemic saw many people’s incomes fall.

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Nic studied for a BA in journalism at Cardiff University, and has an MA in magazine journalism from City University. She has previously worked for MoneyWeek.