The products are priced at 3.89 and 4.09 per cent fee-free and offered up to a maximum loan size of £400,000 at four times loan to income (LTI).
These products are not available for remortgages or further advances, with new-build properties and flats excluded.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, (pictured) said: “We want to help more people to be able to buy a home, even if they only have a small deposit. Saving for a 10 per cent deposit can be challenging for some would-be buyers and these products help to expand the range of options available to them.”
He added: “We would urge brokers to take full advantage of the affordability calculator and case packaging tools on our website as this will help us to deal with cases as quickly as possible.”
Chancellor Rishi Sunak announced the mortgage guarantee scheme in the budget with six lenders signed up to lend in partnership with the scheme from mid-April.
However, a raft of lenders have launched back into 95 per cent LTV lending outside the scheme with Accord first, followed by Bank of Ireland, which extended its 95 per cent range yesterday, Skipton, Aldermore, Danske Bank and Coventry today, with TSB promising an April launch.
Questions remain over the cost of the scheme and the fact none of the lenders launching without the scheme intend to lend on new build. However, brokers were quick to welcome its introduction as it spurred on an already frenzied homebuyer market given the extension of the Stamp Duty Land Tax holiday also confirmed on Budget day on 3 March.
The government scheme is open to all buyers with a five per cent deposit for properties worth up to £600,000. It has been largely modelled on the previous Help to Buy scheme launched in 2013 to help lenders transition back into the market and is open to second-hand and new-build properties.
The UK’s biggest banks confirmed participation in the scheme from mid-April and include Lloyds, NatWest, Santander, Barclays and HSBC with Virgin Money readying to launch in May.
All mortgages will need to be repayment, not interest-only, on a loan to value of between 91 to 95 per cent and are subject to the usual affordability rules. All participating lenders will be required to offer a five-year fixed rate product as part of its guaranteed range of mortgages.
Help to Buy
The government’s new Help to Buy scheme, which supports new-build lending, will replace the current scheme, which ends tomorrow and runs until March 2023.
The new Help to Buy scheme introduces property price caps and is restricted to first-time buyers only.