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LIFT mortgages explained

Can I buy a property with the LIFT scheme? Find out here.

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By Pete Mugleston   Mortgage Advisor

Last updated: 24th June 2019 *

We get lots of enquiries from people who ask ‘can I get a mortgage using the Scottish LIFT Scheme?’

Depending on your circumstances and with the right advice, the answer is yes.  The advisors we work with are experts when it comes to helping people with LIFT and getting the best deal, even if they have been declined a mortgage or even had bad credit.  

In this guide, we have gathered all the key information you’ll need to know about the scheme, including:

If you are looking for professional advice about how to get a mortgage through the LIFT scheme, speak to an advisor here.

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What is the LIFT scheme?

Lift, (also known as Low-cost Initiative for First-Time Buyers) is a Scottish Open Market Shared Equity Scheme that helps buyers on low to moderate incomes to purchase a home.

The scheme provides eligible applicants with funding between 10% and 40% toward the purchase price of a property.

How does LIFT work?

The scheme requires that you own 60%-90% of the property, with the Scottish Ministers providing funding for the remaining equity.

For example, if the property has a market value of £100,000 and you wanted to own 70% of the properties equity, you would need to contribute £70,000.

The Scottish government would then fund the additional £30,000 (30%) of the property value. You would have full ownership of the 70% you own and the government would own the additional shares.

Can I buy any property with the LIFT scheme?

There are property size and price thresholds that you need to consider when buying a home through the LIFT scheme. The Scottish government has set limits that restrict buyers as they will only be able to purchase properties that are suitable for their needs.

For example, a single applicant with one child could be entitled to purchase up to a two bedroom property.

As well as this, there are also limits as to the price of a property which you can buy, and these differ across the country as they are set by each local authority.

For more information on this and to find out more about the property size and price thresholds in your area, contact a specialist.

Who is eligible for the LIFT scheme?

To apply for the LIFT scheme, you must be:

  • A first time buyer (although there are exceptions to this)
  • Aged 18 or over
  • A UK citizen
  • Planning on buying a property in Scotland

Are some buyers given priority for the LIFT mortgage program?

Although the scheme is open to all first time buyers, it is also open to priority group applicants which includes:

  • People aged over 60
  • Social renters (people who rent from the council or a housing association)
  • Disabled people
  • Armed forces members
  • Veterans who have left the armed forces within the past two years
  • Widowers and other partners of service personnel for up to two years after their partner has died

How much deposit will I need for a UK LIFT mortgage?

You should be aware that a lender may expect you to provide a modest deposit in order to obtain a government backed LIFT mortgage.

The amount of deposit you need to pay will vary depending on the risk you pose to a lender for not paying back the loan. Most residential lenders ask for a deposit between 10-15% however, there are a few that only require a 5% deposit.

Before applying, speak with your mortgage advisor to discuss how much you may need for a deposit as every lender will have a different appetite to lend to someone with your circumstances.

How much equity can I afford to buy?

The amount you can borrow depends on many factors including:

Many people come to us confused after using a LIFT scheme mortgage calculator. Online tools can provide a quick and easy estimate to help you gage how much you can afford to borrow.

However, these calculators can be very vague and therefore leave out important factors that could affect the end figure you are presented with.

For an accurate insight into how much you can afford to borrow, speak to a mortgage broker who can look at your financial and personal circumstances in depth to provide you with a clearer estimation.

Alternatively, see our affordability section here.

FAQs

Can I increase my shares in the future?

Potentially yes as in most areas you can increase your share up to 100%.

Can I sell my home in the future?

Yes although, if you sell your home, you will be required to repay funds to Scottish Ministers.

Can I buy the property that I’m currently renting?

No. You will not be able to buy your existing home from your landlord through the Open Market Shared Equity Scheme. However, you may be eligible to buy a property that is for sale on the open market.

Are there LIFT scheme mortgage lenders?

There are providers who participate and have experience with LIFT mortgages which can make the process of applying for a mortgage through the scheme a lot smoother.

Researching which lenders to go to for a LIFT mortgage can be time consuming and a little overwhelming for some, especially without the knowledge of the current rates and terms.

The good news is that we work with brokers throughout Scotland who have access to hundreds of lenders. Each one is carefully vetted by our team to ensure they have the necessary knowledge and competency to find you the best mortgage.

Why you should speak to a LIFT mortgage advisor

It’s important that you choose a broker who has a proven track record of negotiating mortgages, particularly LIFT mortgages.

Many mainstream lenders lack the specialist knowledge needed to properly assess your application which can unfortunately result in many people being unnecessarily rejected for a mortgage.

To avoid this, we strictly only work with qualified advisors who are:

⦁ Whole of market brokers

⦁ OMA Accredited

⦁ LIBF Training course qualified

Contact a LIFT scheme expert

If you have questions about the LIFT scheme or how to get a mortgage, speak to an expert for the right advice. Call Online Mortgage Advisor today on 0800 304 7880 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 24th June 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

Find out more about government schemes

Government Mortgage Schemes