The mortgage guarantee program will be to help future homeowners with small deposits on the real estate ladder and stimulate the market in next week’s budget.
On Wednesday, he will detail how the government will provide lenders with the guarantees they need to make home loans covering the remaining 95%.
The Treasury Department said low-deposit mortgages have nearly disappeared due to the economic impacts of the coronavirus epidemic.
Prime Minister Boris Johnson said: “I want a generation’s rent to become a purchase for every generation, and 95% mortgage guarantees help fulfill that promise.
“Young people should not feel excluded from the possibility of owning their own home, and now it will be easier than ever to climb the home ownership ladder.”
The program, which will undergo regular affordability checks, will be available to Lenders from April.
It is based on the Mortgage Guarantee Assisted Buying System introduced by David Cameron and George Osborne in 2013, which lasted until June 2017.
With the aim of revitalizing the market after the 2008 financial crisis, the program is said to have helped more than 100,000 families purchase a home across the UK.
“Owning a home is a dream for millions of people across the UK and we want to help as many people as possible. Saving for a large deposit is often difficult, and the epidemic has reduced the number of low-deposit mortgages available,” said Mr. Sunak.
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