Doulton Bridging Finance
New Build Mortgages — Mortgage Guarantee Scheme

Mortgage Guarantee Scheme for New Build Properties 2026 — 5% Deposit, Permanent

Mortgage Guarantee Scheme for new builds 2026 — permanent from July 2025, 95% LTV, up to £600,000. Which lenders? How to apply. Doulton Bridging Finance.

The Mortgage Guarantee Scheme (MGS) is now permanent — confirmed from July 2025. It allows first-time buyers and home movers to buy a new build house with a 5% deposit up to a purchase price of £600,000. The government guarantees the portion of the mortgage above 80% LTV, reducing the lender's risk and enabling 95% LTV lending where most lenders would not otherwise go. Four major lenders participate: Nationwide, Halifax, Virgin Money, and TSB.

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5%
Minimum deposit under MGS — permanent scheme from July 2025
£600,000
Maximum property value for Mortgage Guarantee Scheme
95% LTV
Maximum LTV — government guarantees above 80% LTV
4 lenders
Nationwide, Halifax, Virgin Money, TSB — all accessible via DBF
Current rates · Updated August 2026Residential Mortgage Rates 2026UK residential mortgage rates in 2026 range from 4.33% for the best 2-year fix (Danske Bank, 60% LTV, August 2026) to above 6% for high-LTV or complex income cases.
View the rate guide
NEW BUILD MORTGAGES — MORTGAGE GUARANTEE SCHEME

How MGS works

The government guarantees the portion of the mortgage between 80% and 95% LTV. If the borrower defaults, the government covers a proportion of the lender's losses above 80% LTV. This reduces the lender's risk — enabling them to offer 95% LTV products that they might not otherwise provide. The borrower pays the standard mortgage rate (no scheme fee). The guarantee is between the government and the lender — it is invisible to the borrower. MGS does not reduce your interest rate (unlike Own New Rate Reducer).

MGS on new build vs resale

MGS applies to both new build and resale properties. For new build, the same £600,000 cap and 95% LTV limit apply. However, some MGS lenders apply more conservative LTV criteria to new builds than to resale (e.g. 90% LTV rather than 95% on new builds). DBF confirms the specific LTV available for your new build property with each MGS lender before application.

MGS and new build flats

MGS is primarily effective for new build houses. For new build flats, lenders generally cap at 85% LTV regardless of MGS — meaning the minimum deposit for a new build flat is typically 15%, not 5%. MGS does not override this lender-specific constraint. If you are buying a new build flat, DBF identifies which lenders offer the highest LTV for your specific flat's location and building type.

MGS combined with LISA

The Mortgage Guarantee Scheme can be combined with a Lifetime ISA (LISA). Your LISA savings and government bonus contribute to the deposit — and the MGS provides the 95% LTV facility on top. On a £285,000 house: 5% deposit = £14,250. If LISA has £10,000 accumulated (£8,000 saved + £2,000 bonus), the remaining £4,250 is required from savings. This combination is one of the most accessible routes for a first-time buyer. Note: LISA property price cap of £450,000 applies.

MGS vs Own New Rate Reducer

MGS allows a 5% deposit but does not reduce your interest rate. Rate Reducer reduces your rate significantly but requires the developer's participation and cannot be combined with MGS. If the development is Rate Reducer eligible and you have a 5% deposit, DBF compares: (a) MGS at market rate on 95% LTV; (b) Rate Reducer at subsidised rate on 80% or 85% LTV (larger deposit required). The total cost over the initial period determines which route is better.

Mortgage Guarantee Scheme — Participating Lenders August 2026

LenderNew build house 95% LTVNew build flat 95% LTVKey notes
NationwideYes — MGS participant85% LTV max for flatsStrong new build appetite. Competitive MGS rates.
HalifaxYes — MGS participant85% LTV max for flatsKey MGS lender. Also participates in Own New Rate Reducer.
Virgin MoneyYes — MGS participant85% LTV max for flatsMGS and Rate Reducer participant. Competitive terms.
TSBYes — MGS participantNot standardLimited new build flat appetite. Stronger on houses.

Worked example

First-time buyer. New build house £285,000. Available deposit: £14,250 (5%).

  • Route: Mortgage Guarantee Scheme. Mortgage: £270,750 (95% LTV).
  • Lender: Halifax MGS. Rate: 5.20% (2-year fix, 95% LTV MGS). Monthly: £1,651.
  • Stamp duty: £0 (FTB, below £300,000 threshold).
  • LISA contribution: £8,000 savings + £2,000 bonus = £10,000 toward deposit.
  • Additional savings needed: £4,250. Total ready to proceed.
  • Completion: 6 weeks from application to mortgage offer.
The Process

How it works

01

Tell us about your purchase

Share the property details, development, scheme type (Rate Reducer, MGS, shared ownership), and your deposit. We assess your situation same working day.

02

Lender search and scheme check

We identify which lenders accept your income type, development, and property classification — including Rate Reducer and MGS eligibility where relevant.

03

Application and valuation

We manage the full application, coordinate the RICS valuation, and liaise with the developer on build schedule and offer validity.

04

Mortgage offer and completion

Once the offer is issued, we monitor build progress, manage any extensions needed for off-plan delays, and coordinate completion.

FAQs

Frequently asked questions

Is the Mortgage Guarantee Scheme still available in 2026?

Yes — MGS was made permanent from July 2025. It is available indefinitely for eligible buyers. Properties must be valued up to £600,000. The scheme applies to both new builds and resale properties.

Can I use MGS for a new build flat?

MGS applies in principle but new build flat LTV limits (typically 75%–85%) prevent most lenders from offering 95% LTV on flats regardless of MGS. In practice, MGS is most effective for new build houses. DBF advises on the highest LTV available for a new build flat.

Is MGS better than Own New Rate Reducer?

They serve different purposes. MGS enables a 5% deposit without changing your interest rate. Rate Reducer significantly reduces your rate during the initial period but requires the developer's participation and a larger deposit (typically 10%+). Where both are available, DBF compares the total cost over the initial fixed period to determine which is better for your purchase.

Do I pay extra for the Mortgage Guarantee Scheme?

No — the government pays a fee to the lender for the guarantee. You pay the standard mortgage rate with no scheme surcharge. The benefit is access to 95% LTV that would not otherwise be available.

Which lenders offer MGS on new builds?

Nationwide, Halifax, Virgin Money, and TSB are the four participating lenders. Each has slightly different criteria on new build properties, new build LTV, and extension of offer validity for off-plan. DBF advises on which lender is most appropriate for your specific property.

Related finance

Explore related pages

New Build Mortgages Hub

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New Build Mortgage for FTBs

New build mortgage for first-time buyers 2026 — 5% deposit routes, stamp duty relief, Own New Rate Reducer, LISA bonus. Approved Own New broker.

Own New Rate Reducer

Own New Rate Reducer 2026 — mortgage rates from 1.87% on new build properties. DBF works with Own New participating developments. Compare Rate…

How Much Deposit for a New Build?

How much deposit for a new build mortgage 2026 — houses vs flats, 5% routes, incentive impact, LISA boost, worked examples at £250k, £350k, £500k.

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