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Help to buy Scheme storms the UK.

By Lucy James

Published: 7th August 2014 Last updated: 24th January 2019
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Mortgage brokers across the UK have reported praise for the Help to Buy scheme from homebuyers who have only been able to buy their property because the scheme allows just a 5% deposit.

According the Mortgage Advice Bureau, the Help to Buy 2 (HTB2) scheme raised the average loan to value (LTV) by 2% in June, from 92.5% to 94.4%. However, their figures show that the average deposit for borrowers in the market overall actually increased by £6,324.

Since the roll out of the new MMR changes, lenders have been putting borrowers further under the microscope, undergoing even more detailed checks of income and expenditure to assess affordability. It may be that this has left borrowers falling shorter on maximum lending figures, forcing them to find the extra cash from elsewhere.

The impact of a lesser deposit and higher loan amount means that borrowers under the scheme are on average paying an additional £18.77 per month (based on a rate of interest of 5% over a 25 year term).


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