The property market has received a welcome boost this summer with the launch of the 2025 Mortgage Guarantee Scheme, a new permanent government initiative designed to help more people get on — or move up — the property ladder.
At Oakfield, we’re already seeing growing interest from buyers eager to take advantage of this scheme. Whether you’re a first-time buyer or a current homeowner looking to move, here’s what you need to know.
What Is the 2025 Mortgage Guarantee Scheme?
Launched in July 2025 by HM Treasury, the Mortgage Guarantee Scheme encourages lenders to offer high loan-to-value (LTV) mortgages — specifically those covering 91–95% of a property’s value.
The government provides lenders with a partial guarantee, giving them confidence to lend at higher LTVs. In turn, this allows buyers to access mortgages with as little as 5% deposit.
Who Is Eligible?
The scheme is available to:
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First-time buyers
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Existing homeowners looking to move
Applicants must be purchasing a main residence, and the property value must not exceed £600,000.
Important exclusions:
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New-build homes
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Second homes
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Buy-to-let or commercial properties
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Interest-only mortgages (only repayment mortgages are eligible)
What Does This Mean for Buyers?
For homebuyers, this scheme offers the confidence and opportunity to buy with a low deposit — which is especially valuable in today’s housing market, where saving a large deposit remains a challenge.
Borrowers still go through the standard mortgage affordability checks and remain responsible for repaying the full loan plus interest and fees.
This is not a discount or a shared-ownership model — it’s a way to access a standard mortgage with a lower upfront cost.
What About the Lenders?
Participating lenders receive a government-backed guarantee on a portion of the loan amount above 80% LTV. If a borrower defaults and the property sells for less than the outstanding mortgage, the government covers some of the loss. Lenders pay a fee to participate in the scheme.
The government hopes this will keep 95% LTV mortgages consistently available, even during periods of market uncertainty.
How Will This Impact the Property Market?
This scheme aims to:
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Support aspiring homeowners with limited savings
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Encourage more lenders to confidently offer 95% LTV products
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Bring more buyers into the market, especially younger or first-time buyers
However, some experts note that many lenders already offer similar products — so the overall market impact may vary by region and lender. Nonetheless, the government has made this scheme permanent, signalling a long-term commitment to accessible homeownership.
Looking Ahead: More Support May Be on the Way
The Mortgage Guarantee Scheme forms part of wider government plans to improve access to mortgages. Other proposals include:
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Relaxing loan-to-income (LTI) rules
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Considering rental payment history in affordability assessments
These changes could further expand mortgage eligibility, especially for renters with strong payment records but limited savings.
Final Thoughts from Oakfield
The 2025 Mortgage Guarantee Scheme is a positive step for anyone looking to buy with a smaller deposit. If you’ve been holding off on your property plans due to affordability concerns, now may be the right time to revisit your options.
At Oakfield, we’re here to help you navigate the changing mortgage landscape and find the right home for your needs — whether you’re buying your first property or making your next move.