Halifax unveils NewBuy 95% LTV mortgages

New mortgages from Halifax available up to 95% loan-to-value as part of NewBuy scheme.

Halifax has become the latest lender to launch NewBuy mortgages, available to borrowers with just a 5% deposit.

The Government’s NewBuy scheme kicked off in March, aimed at helping more homebuyers take the first step onto the property ladder. Three lenders unveiled deals at the outset of the initiative – Barclays, NatWest and Nationwide.

And now Halifax has joined the party, with two two-year fixed rate deals, available to borrowers with a deposit of 5-10% who want to purchase a new-build property. The first offers a rate of 5.99% and comes with a fee of £999. Alternatively, you can skip the fee, but you will face a higher rate of 6.39%.

How the deals compare

There are currently just two other two-year fixed rates available on the NewBuy scheme. And both are significantly better than the Halifax deals. Barclays has a two-year deal at 5% with a fee of £500 and NatWest is offering a rate of just 4.79% with a £499 fee.

For a full rundown of the rest of the NewBuy offers, check out The best NewBuy 90% and 95% mortgages.

How NewBuy works

The NewBuy scheme has two main aims - getting first-time buyers onto the housing market, and getting the new-build market moving again. Indeed, critics of the scheme suggest it’s more about the latter than the former.

The NewBuy initiative is only available in England, and sees the builder of the property and the Government guarantee the borrowing. The builder pays 3.5% of the sale price into a special indemnity fund at the bank which has provided the mortgage for seven years. This can then be used to cover any losses should the buyer fall into financial difficulty or if the property is repossessed.

The Government provides a further guarantee of 5.5%, though this money is only accessible in the event of a major property crash.

More on property and mortgages:

Property asking prices hit record high - in the south

The top 10 fixed rate mortgages

The hidden cost of buying a new build

New Government planning policy does not go far enough

Will borrowers with rented solar panels have trouble remortgaging?

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At lovemoney.com, you can research all the best deals yourself using our online mortgage service, or speak directly to a whole-of-market, fee-free lovemoney.com broker. Call 0800 804 8045 or email mortgages@lovemoney.com for more help.

This article aims to give information, not advice. Always do your own research and/or seek out advice from an FSA-regulated broker (such as one of our brokers here at lovemoney.com), before acting on anything contained in this article.

Finally, we tend to only give the initial rate of a deal in our articles, but any deal which lasts for a shorter period than your mortgage term may revert to the lender's standard variable rate or a tracker rate when the deal ends. Before you take out a deal, you should always try to find out from your lender what its standard variable rate is and how it will be determined in the future. Make sure you take all this information into account when comparing different deals.

Your home or property may be repossessed if you do not keep up repayments on your mortgage