Autumn statement brings first Help to Buy deals for remortgagers

George Osborne has confirmed in his Autumn Statement that two lenders would bring forward their Help to Buy offerings – which include the first spate of deals for remortgagers.

Until now, only three lenders, Halifax, HSBC, RBS/NatWest, have announced details of deals offered under the mortgage guarantee part of Help to Buy. And all of these lenders are currently only offering deals to people buying a home (whether it’s their first home or they are moving) – but not to those looking to stay put and change mortgages.

The Chancellor, George Osborne announced in the Autumn Statement that Aldermore and Virgin expect to launch their Help to Buy mortgage guarantee ranges this month.

Aldermore said details of its deals will be released on Monday December 16, having announced previously announced a release date of January next year. The bank confirmed that its deals would be available for purchases and remortgages.

Charles Haresnape, managing director of Residential Mortgages at Aldermore said:  "I am delighted to announce Aldermore's participation in Help to Buy mortgage guarantee. We are committed to lending to homeowners in the UK, especially those with small deposits, to get on the housing ladder and those who are unable to access mortgages from traditional high street lenders, despite being creditworthy. We are the first and only bank in the scheme to offer remortgages so far."

Virgin, however, which also originally planned to announce its offerings in January, said it couldn’t confirm a launch date for its Help to Buy guarantee deals, or whether they would be available for both purchases and remortgages. The bank said only that an announcement of rates would be made “in due course.”

How the Help to Buy mortgage guarantee works

Under this part of the Help to Buy scheme, buyers or those remortgaging are required to put down a minimum 5% deposit, but the Government then provides a guarantee to the lender for up to a further 15%.

If the property ends up having to be repossessed because the homeowner can’t keep up with repayments, lenders will only face losses of 5%, with the Government paying them back them the rest. This guarantee lasts for seven years, and in return, lenders must pay the government a fee of up to 0.9% of the value of the mortgage to cover any possible taxpayer losses if borrowers fail to keep up with their repayments.

The guarantee part of the scheme applies to both existing homes and new-build properties, up to a maximum value of £600,000.

Current Help to Buy mortgage guarantee deals

HSBC is offering two fixed rate Help to Buy mortgages. The first is a two year fixed rate deal at 4.79%, and has a £99 booking fee. The second deal is a 4.99% five year fixed, again with a £99 booking fee. Both deals are available to borrowers with just a 5% deposit to put down.

Although HSBC has said it will look at offering these loans to remortgage customers “at a later date,” it has yet to confirm when this will be.

RBS and NatWest are offering a two-year fixed rate for those buying under the mortgage guarantee part of the scheme at 4.99%, with no fee. Halifax, however, is offering a two-year fixed rate deal at 5.19% with a £995 fee.

Aldermore’s rates won’t be confirmed until December 16, but the bank has said it will offer two-ear fixed rate mortgages for loans between 85.01% and 95% of the property value.

Other options

Although several of the Help to Buy deals are competitive, there are other mainstream options available for those with small deposits to put down.

Chelsea Building Society, for example, is offering a 4.59% two year fixed rate deal which is available for first-time buyers and remortgagers, although it has a hefty £1,545 arrangement fee. There is, however, a two-year fee free fixed rate available at 4.89% for those who don’t want to pay a fee.

For those looking to lock into a fixed rate for longer, Nottingham Building Society is offering those with a 10% deposit to put down a five year fixed rate deal at 4.65% with a £199 fee. This deal comes with a free basic valuation and basic legal work.

Whichever mortgage you are considering, whether it’s a Help to Buy or a mainstream deal, remember that there are lots of other costs to factor in. You will need to pay Stamp Duty, survey, valuation and legal bills, all of which can add thousands to your overall costs.

Read more about Help to Buy with our guide and shop around for a 95% mortgage.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct

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