Please note that the MI New Home Scheme has now closed to new applications
The Scottish government support their selected lenders, by agreeing to cover any loses, allowing your mortgage deposit to be lower.
Most mortgages expect you to put down a deposit, which can be quite large, sometimes up to 25% of the property value. The MI New Home scheme aims to open up the property market to those who do not have that amount of money readily available, and do not want to save up for a long time. The MI New Home scheme allows you to put down a deposit of between 5% and 10% if you meet their requirements, and wish to buy a newly built home in Scotland. The scheme is open to both first time buyers, and those who are moving house.
The scheme is partnered up with certain home builders, meaning that if you want to use the MI New Home scheme in order to purchase a home with a small deposit, you need to find a new home which was built by a firm that is part of the scheme. A list of partner builders can be found on the MI New Home website.
However, builders are often linked to certain lenders, meaning that if you want to take advantage of the MI New Home scheme, you must take the mortgage offered by the builders' chosen lender. This restricts your choices, and some banks may not offer you the lowest deal possible. If you are looking for a mortgage for a new build, it may be a good idea to compare a MI New Home scheme mortgage with a low-deposit mortgage as these may offer lower interest rates, saving you money.
The MI New Home scheme is best suited to those who plan to live in their property for a long period of time, rather than people who plan to sell it soon after, as MI New Home mortgages often have a high Loan to Value rate.
The amount of money that you can borrow depends on your lender and on your own circumstances, as some lenders will let you borrow more than others.
No. You can take out a mortgage of between 90% to 95% with the MI New Home Scheme. However, it may be cheaper for you to abandon the scheme entirely, if the lender your developer is affiliated with does not have the best deal on offer. It is a good idea to compare low deposit mortgages to ensure you have the best deal available.
Some properties which are part of the MI New Home scheme have an additional premium on the sale price which can reduce when the property is occupied. This means your home could dramatically fall in value as soon as you move in. This is something you should consider if you by a property with a higher Loan to Value (LTV) loan. If house prices fall you may not have enough money from selling the property to repay the mortgage.
Or you can either call our team on 0118 321 8197 - or pop your details into our form by clicking above and we will be in touch as soon as possible.
Our service provides mortgages from the 'whole of market' meaning that rather than just one mortgage being considered for you a wide range of products with differing features, terms, rates and policies can be offered. This choice is a key benefit of our service.
Our mortgage service is provided by London & Country Mortgages Ltd. Beazer House, Lower Bristol Road, Bath, BA2 3BA who are authorised and regulated by the Financial Services Authority. Their FCA number is 143002. You also have the added reassurance of a MoneyMaxim consultant on hand in case of any queries or additional guidance.
This content was last reviewed on 17/09/2019