The scheme will enable creditworthy borrowers to access 90 to 95% Loan to Value mortgages from participating lenders to buy new-build homes in Scotland, with a maximum sales price of £250,000. The Scottish government will support the scheme by providing a guarantee.
Homebuilding industry body, Homes for Scotland, who helped develop the scheme is projecting that it has the potential to generate sales of up to £1bn over three years.
The Royal Bank of Scotland has launched two products through the scheme which include a two-year fixed rate at 4.49% and a five-year fixed rate at 4.79%. Both products are available up to 95% LTV and are fee free.
Moray McDonald, mortgages director at RBS said: “We are one of the few banks who have maintained 90% LTV lending for second hand homes continuously since the financial crisis. The scheme allows us to extend 90 – 95% loans to new home buyers, backed by strong promotional rates which are fee free.”
Nationwide’s deals include three and five-year fixed rates.
Its three-year fixed rates are available from 5.49% and 5.39% for existing customers, available up to 95% LTV. Deals include a £900 product fee, £99 booking fee for both first-time buyers and existing customers. A £500 discount applies for first-time buyers.
Its fee-free option is available at 5.79% or 5.69% for existing customers, which includes a £99 booking fee.
Its five-year fixed rates are available at 5.59% for first-time buyers and 5.49% for existing customers, available up to 95% LTV. The deals also include a £900 product fee, £99 booking fee for both first-time buyers and existing customers. A £500 discount applies for first-time buyers.
Product fee-free options are available at 5.79% or 5.69% for existing customers. The deal includes a £99 booking fee.
Andrew Baddeley-Chappell, head of mortgage strategy & policy at Nationwide added: “We are pleased to support the scheme which offers those with lower deposits a step up on to the housing ladder and helps to provide much needed new housing. Our approach helps to ensure the maximum access to home builders and customers.”
The Bank of Scotland/Halifax said it will offer mortgages through the scheme in the near future. Twelve house builders have signed up for the scheme to date.
Homes for Scotland chief executive, Philip Hogg said: “With housing output at its lowest level since the Second World War, the main obstacle to recovery in our sector remains constraints on mortgage lending, particularly in relation to high deposits. The scale of the problem is highlighted with a Scottish home buyer paying an average deposit of 25%.
“We need new and creative ways of thinking in order to get the marketing moving again and more homes built. Only through the implementation of innovative measures like MI New Home can we ensure Scots have access to a full range of housing options.”
