20 Dec 2021

Deposit Unlock mortgages launched nationally

New build home buyers can

purchase with a 5% deposit


  • Qualifies for newbuild properties for both first-time and second-time buyers up to £750,000
  • 17 major builders onboard after a successful regional pilot
  • Builders required to take out a mortgage indemnity insurance policy
  • Nationwide and Newcastle Building Society have signed up to the scheme
  • More lenders expected to join in 2022

How it works

To use the scheme, builders will be required to take out mortgage Indemnity Insurance. The policy reduces risk for the lender, protecting them from a proportion of the potential loss in the event of any lender loss as a result of default.

Upon purchase completion, the builder pays a percentage of the purchase price into a mortgage indemnity insurance policy.

Each lender using the scheme will assess affordability for the buyer in the normal way using their lending criteria, which includes consideration of income, outgoings such as regular payments and living costs, as well as an assessment of future changes that might have an impact on a borrower’s ability to pay a mortgage.

Deposit Unlock will be available on developments across England, Scotland and Wales and is open to all HBF members.

Contact your existing Broker or one of our network partners to participate.


What is mortgage indemnity insurance?

You may hear it referred to as a mortgage indemnity guarantee (MIG), higher-lending fee or charge (HLC), additional security fee or mortgage advance premium.

In a nutshell, it’s a form of insurance that you pay for but that actually benefits your lender. It is designed to reimburse the lender if a high proportion of the property’s value is borrowed, typically 90% or more and the homeowner can’t keep up the repayments.

Roughly two-thirds of mortgage lenders will charge a mortgage indemnity premium for borrowing at this level.


Impact on the market

With house prices rising, Deposit Unlock will help open up the newbuild market to more borrowers who do not have access to large deposits and help soften the blow of the withdrawal of the Help to Buy Equity Loan scheme, that has been so important for home buyers and housing supply over recent years.

Help to Buy has already assisted more than a third of a million households to purchase a new build home since its launch in 2013 and has been a major contributor to a doubling of housing supply over the past eight years and 70,000 equity loans have been fully paid back by homeowners.


What Nationwide is offering

The Nationwide offer is available through mortgage brokers for properties between £25,000 and £750,000. Borrowers using Deposit Unlock will have access to the Society’s range of 95% LTV mortgages, currently starting from 2.62%, which they can us to buy a house or flat.


Housebuilders involved

The 17 partaking house builders are Barratt, Bellway, Bewley, Bloor Homes, Countryside Properties, Crest Nicholson, Croudace, Davidson Group, Fairview, Hill, Keepmoat, Miller, Persimmon, Redrow, Taylor Wimpey, Thakeham and Vistry. Further builders are expected to join the scheme.


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Working in partnership with leading development finance lenders, including: