The Deposit Unlock Scheme: Buy a New Build with a 5% Deposit
The Deposit Unlock Scheme is a private-sector initiative designed to make new-build homes more accessible to buyers with a small deposit.
It allows both first-time buyers and home movers in England and Wales to secure a 95% Loan-to-Value (LTV) mortgage on a new build property.
Unlike traditional new build mortgages that demand higher deposits, this scheme works by having the house builder cover the cost of the mortgage insurance, dramatically reducing the risk for the lender.
How the Deposit Unlock Scheme works
The core feature of Deposit Unlock that makes 95% LTV possible is its mechanism of shifting risk away from the mortgage lender. It is not a government loan, nor is it an equity loan.
- The house builder (developer) pays a small levy on the property sale price into an insurance fund.
- This fund acts as financial protection for the participating mortgage lender.
- If the property were ever repossessed and sold at a loss, the lender is protected by the insurance fund, making the high-LTV mortgage significantly less risky for them.
- Because the lender's risk is lower, they are willing to offer a 95% LTV mortgage at interest rates that are often competitive with lower-LTV products.
This scheme is the private market's effective replacement for the Help to Buy equity loan, offering buyers a path to ownership without owing the government a stake in their home.
The New Build Boost scheme offers a very similar 95% LTV pathway for new builds and is available through some of the same high street lenders. If you don't meet the Deposit Unlock criteria, or if your preferred builder isn't participating, ask your broker about the New Build Boost scheme as an alternative option.
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Eligibility criteria and property caps for Deposit Unlock
The Deposit Unlock Scheme has straightforward rules set by the New Homes Quality Board (NHQB) that both the applicant and the property must meet. You need to ensure you satisfy all criteria before applying to a mortgage lender.
Buyer eligibility
- You must have a minimum of a 5% deposit (95% LTV mortgage).
- The scheme is open to first-time buyers and existing homeowners (home movers).
- The property must be your primary residence and cannot be used for buy-to-let.
- Available for homes in England and Wales only.
Property eligibility and caps
- Must be a new build home purchased from a participating builder.
- The maximum purchase price is generally £750,000.
- The house builder must be officially registered with the Deposit Unlock scheme.
- The property must come with a recognised new home warranty (e.g., NHBC).
While the £750,000 cap is the national limit, some individual mortgage lenders may impose lower regional limits. Always confirm the exact price cap with an independent broker before committing to a builder's reservation fee.
No, they are fundamentally different. Deposit Unlock is a private-sector, commercial scheme where you own 100% of the equity from day one.
Help to Buy was a government-backed scheme that provided an equity loan (usually 20%), meaning the government owned a stake in your property's value.
Deposit Unlock is cleaner and has no future repayment obligations to the government.
Pros and cons of Deposit Unlock
Pros of the Deposit Unlock Scheme
- 95% LTV: This is the key benefit, allowing you to buy a new home with just a 5% deposit.
- Better Interest Rates: Due to the builder's insurance, the mortgage lender's risk is lower. This often translates to interest rates that are more competitive than standard, non-scheme 95% LTV mortgages.
- Open to Home Movers: Unlike the former Help to Buy Equity Loan, this scheme is available to both first-time buyers and existing homeowners looking to move to a new build.
- Full Ownership: You own 100% of the property from day one. There is no government loan or equity stake, meaning no complex repayments or restrictions if you sell in the future.
Cons of the Deposit Unlock Scheme
- New Build Only: You are restricted to properties from participating new-build developers, limiting your choice compared to the wider second-hand market.
- The "New Build Premium": New homes often carry a price premium compared to equivalent older properties, which can sometimes offset the savings from the low deposit.
- Limited Lender Choice: While major banks participate, the overall pool of lenders and specific product choice is smaller than the general mortgage market.
- Price Cap: Properties above the national £750,000 limit (or any stricter regional limits imposed by the lender) are not eligible.
How to get a Deposit Unlock mortgage
You cannot apply for a Deposit Unlock mortgage with just any lender. You must use a lender who has officially signed up to the scheme, and your chosen property must be from a participating developer.
Because the scheme is private and not widely advertised by all lenders, the most effective, and often only, route to accessing the best interest rates is to use an independent mortgage broker.
The broker's role
They work with all participating Deposit Unlock lenders (including major high street banks) and can compare every single available rate, not just the deals offered directly by one lender.
A broker can immediately confirm if your specific house builder is registered and if the property price falls securely within the scheme's £750,000 limit, saving you wasted time and reservation fees.
Lender criteria are often stricter for new build properties. A broker will conduct a full, independent affordability assessment to ensure your application meets the specific Deposit Unlock lender requirements.
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