Builder claims mortgage indemnity scheme first
The house building arm of Galliford Try has claimed the first offering of finance backed by the government’s mortgage indemnity scheme.
Linden Homes is launching a 95 per cent mortgage for people buying its new homes at an interest rate fixed at 4.99 per cent until 2015.
Under the mortgage indemnity scheme builders pay 3.5 per cent of the purchase price of a home into a fund, with additional security provided by the government. This encourages lenders to offer mortgages at a higher loan to value ratio than through a conventional mortgage product.
Linden is offering buyers with 10 per cent or 15 per cent deposits more favourable fixed rates of 4.49 per cent and 3.99 per cent respectively.
The developer is also launching another mortgage product, ‘Deposit assist’, with Hitachi Capital. This allows buyers to take out an unsecured loan amounting to 15 per cent of the purchase price to build on a 5 per cent deposit.
Ian Baker, group managing director at Linden Homes, said: ‘Affordable, responsible lending is critical in helping to boost not only the house building industry, but the wider economy.’