Borrowers using the scheme will have access to the lender’s range of 95 per cent LTV mortgages, which start from 2.89 per cent, and can be used to buy a house or flat.
The Deposit Unlock scheme is a mortgage indemnity scheme, developed by the Home Builders Federation and insurance broker Gallagher Re, and aims to help borrowers secure a new build property with small deposits.
The scheme will be available for over 1,000 new build sites across England, Scotland and Wales, and will then expand to include more Housing Building Federation and Homes for Scotland members.
Both first-time buyers and second stepper borrowers can access new build loans of between £25,000 and £750,000 as part of the scheme.
Borrowers will also be able to access the Society’s Green Reward if a property has a Standard Assessment Procedure rating of 86 plus or an Energy Performance Certificate of B or higher. It offers cashback worth between £250 and £500 depending on the rating.
Newcastle Building Society launched its first 95 per cent LTV mortgages as part of the scheme earlier this year. This includes a two-year fixed rate at 3.5 per cent and a five-year fixed rate priced at 3.75 per cent.
Henry Jordan, Nationwide Building Society’s mortgages director, said that the need for more new homes has never been more apparent and the scheme would be a “long-term alternative” to the Help to Buy scheme.
He said: “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.
“Our homes are where we have one of the biggest individual impacts on climate change and we remain committed to helping make the homes we lend on greener and more sustainable, which is why we continue to reward those who buy the most energy efficient properties with cashback offer under our Green Reward scheme.”
Steven Rance, Gallagher Re’s managing partner of mortgage indemnity reinsurance, said: “We are delighted to welcome Britain’s biggest building society as the first major lender to go live with the house builder-owned scheme, massively extending its reach to help low-deposit buyers right across England, Scotland and Wales realise their dream of home ownership.
“Deposit Unlock demonstrates cross-industry collaboration at its best, with house builders, lenders and the insurance industry coming together for the common good.”
