UK Mortgage Guarantee Scheme: 5% Deposit, 95% LTV, £600,000 Property Cap (2025 Permanent Scheme)
A new permanent UK Mortgage Guarantee Scheme launched in July 2025, replacing the temporary scheme that closed June 2025. Buyers can use a deposit as small as 5% on properties up to £600,000. Here is what the published rules say, who can use it, and which lenders take part.
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Open calculatorWhat the scheme is
A new permanent mortgage guarantee scheme was launched in July 2025 to replace the previous, temporary mortgage guarantee scheme which closed in June 2025 (HomeOwners Alliance).
The new scheme is permanently available from July 2025 (gov.uk). It sustains availability of 91-95% loan-to-value mortgages by providing participating lenders with a government-backed guarantee (gov.uk).
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Who can use it and how much deposit is needed
Mortgages offered through the scheme will enable eligible first-time buyers and home movers to buy a home with a deposit as small as 5% (gov.uk).
The required loan-to-value sits between 91% and 95% (HomeOwners Alliance). On a £200,000 property, the deposit would need to be between £10,000 (5%) and £18,000 (9%) (HomeOwners Alliance).
The scheme is available throughout the United Kingdom (gov.uk).
The £600,000 property price cap
Under the original mortgage guarantee scheme, properties had to be worth £600,000 or less (HomeOwners Alliance). A property above the £600,000 cap therefore falls outside the scheme regardless of the borrower's other circumstances (HomeOwners Alliance).
What the scheme can't be used for
Some property and product types are excluded outright. The scheme cannot be used to invest in a Buy to Let or to buy a second home (HomeOwners Alliance). Offset mortgages and guarantor mortgages are also not available under the scheme (HomeOwners Alliance).
Borrowers must apply for a repayment mortgage; interest-only mortgages are not allowed under the scheme (HomeOwners Alliance).
Participating lenders
Major mortgage lenders taking part in the mortgage guarantee scheme include Barclays, Lloyds, and Halifax (HomeOwners Alliance). The borrower applies for a 91-95% LTV mortgage with a participating lender, and the lender accesses the government-backed guarantee (gov.uk).
A note on scope
This page covers the published rules of the new Mortgage Guarantee Scheme: the 5% minimum deposit (gov.uk), the 91-95% LTV range (gov.uk), the £600,000 property price cap (HomeOwners Alliance), the Buy-to-Let and second-home exclusions (HomeOwners Alliance), the repayment-mortgage requirement (HomeOwners Alliance), and the participating-lender list (HomeOwners Alliance).
Eligibility for a 91-95% LTV mortgage under the scheme rests with the participating lender (gov.uk).
Frequently asked questions
What is the smallest deposit the scheme allows?
A deposit as small as 5% (gov.uk). On a £200,000 property that is £10,000 (HomeOwners Alliance).
Is it open to home movers as well as first-time buyers?
Yes — the scheme is open to eligible first-time buyers and home movers (gov.uk).
Can the scheme be used for a Buy-to-Let?
No. The scheme cannot be used to invest in a Buy to Let or to buy a second home (HomeOwners Alliance).
What is the property price cap?
Under the original mortgage guarantee scheme, properties had to be worth £600,000 or less (HomeOwners Alliance).
Which lenders participate?
Major lenders taking part include Barclays, Lloyds, and Halifax (HomeOwners Alliance).
Can I use it for an interest-only mortgage?
No. Borrowers must apply for a repayment mortgage; interest-only mortgages are not allowed under the scheme (HomeOwners Alliance).
When did the new scheme start?
A new permanent mortgage guarantee scheme was launched in July 2025 to replace the previous, temporary mortgage guarantee scheme which closed in June 2025 (HomeOwners Alliance).
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