Nationwide has become the first major lender to sign up to the ‘Deposit Unlock’ mortgage indemnity scheme.

The scheme supports 95% LTV lending on new-build properties for both first-time buyers and second steppers up to the value of £750,000.

Nationwide said it is “putting its weight behind the initiative” as part of its wider efforts to get people into homes of their own. The follows the society becoming the first major lender to resume 90% LTV lending to first-time buyers in July 2020 and the return to 95% LTV outside the government’s Mortgage Guarantee Scheme in May 2021. 

Deposit Unlock is intended to help open up the new-build market to more borrowers with a small deposit as unlike the Help to Buy scheme, it is available to second steppers as well as first-time buyers. Nationwide said that the scheme will provide a much-needed alternative for the new-build market after the Help to Buy Equity Loan scheme for first-time buyers comes to an end in March 2023.

The scheme is available through mortgage brokers on standard new-build loans of between £25,000 and £750,000. Borrowers using Deposit Unlock will have access to Nationwide’s range of 95% LTV mortgages, currently starting from 2.89%.

Nationwide director of mortgages, Henry Jordan, commented: “The need for more new homes has never been more apparent and we are keen to support the Deposit Unlock scheme – giving those with smaller deposits further hope that they can get a home of their own. The scheme will be a long-term alternative to the Help to Buy Equity Loan scheme, which is due to end in around 18 months’ time.

“During the pandemic we spent much more time in our homes and for many of us it highlighted the need for a more suitable property. Many people are looking for a home that is energy efficient as climate change becomes a priority and energy bills continue to rise.”

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