NewBuy: the closed new build guarantee scheme

NewBuy has closed. Nobody can apply for a NewBuy mortgage now, and the government guarantee that sat behind those loans is no longer available to lenders. The scheme was one of a family of mortgage guarantees that have all since ended: the Help to Buy mortgage guarantee closed to new loans on 31 December 2016¹, and the later 2021 Mortgage Guarantee Scheme is also closed to new applications².

If you are buying a home today with a small deposit, that matters in a practical way. The guarantee was never money for buyers. It was a promise to the lender, not to you, and it did not reduce what you owed or protect your payments. What it did was make 95% mortgages less risky for lenders to write, which is why they existed at all for buyers with a 5% deposit³.

This page explains what NewBuy and the guarantees around it did, who could use them, where they did not reach, and what a buyer with a small deposit can look at instead.

The scheme is closed: what that means if you are buying now

A closed scheme is not a suspended one. There is no waiting list, no reopening date and no route in through a particular lender or builder. The Help to Buy mortgage guarantee closed to new loans on 31 December 2016¹, and the 2021 Mortgage Guarantee Scheme that replaced it in policy terms is likewise closed to new applications². The pattern is familiar across government-backed housing and savings products: the Help to Buy ISA is closed to new applicants⁶, and the Help to Buy equity loan scheme is no longer available in England or Scotland⁷.

For anyone already holding a NewBuy or Help to Buy guaranteed mortgage, nothing changes. The loan runs on its original terms, the lender still holds whatever guarantee was attached to it, and the borrower's obligations are exactly what they signed up to. If your circumstances change, the route is the same as for any other mortgage: contact your lender as explained in the terms and conditions of the mortgage¹.

For anyone buying now, the practical consequence is that a 95% mortgage has to stand on its own. Lenders still offer them, but on their own commercial terms rather than with a government backstop. That affects pricing, the property types they will accept and how strictly they apply their affordability checks, not whether the product exists.

How a government mortgage guarantee works for the lender

The mechanism is easy to misunderstand, because the word "guarantee" sounds like it is aimed at the buyer. It is not. The guarantee protects the lender against any losses¹. The government takes on part of the risk that a high loan-to-value mortgage goes wrong, which makes that lending cheaper and safer for the bank or building society writing it.

The 2021 scheme described the same idea in its own terms: it existed to sustain availability of 91-95% loan-to-value mortgages by providing participating lenders with a government-backed guarantee². Lenders and brokers describe it the same way, as the government working behind the scenes to encourage lenders to offer 95% mortgages by giving them a partial guarantee⁸, or as the government partially compensating them if they lose money⁹.

Two consequences follow, and both matter to a borrower. First, the guarantee does not change your liability: you owe the full amount, and the lender can still pursue you for it. Second, it does not change the affordability assessment. A lender still has to satisfy itself that you can repay, and the rules on that assessment are set out in the regulator's mortgage conduct rules, which exempt only narrow cases such as a replacement contract with no additional borrowing beyond financing a product or arrangement fee¹⁰.

Who could use the mortgage guarantee: 5% deposit, homes up to £600,000

The Help to Buy mortgage guarantee was aimed at buyers with a deposit of between 5% and 20%⁴. The 2021 Mortgage Guarantee Scheme set its own terms: eligible first-time buyers and home movers could buy a home with a 5% deposit as a share of the purchase price, throughout the United Kingdom². Loans under that scheme could only be offered on properties priced up to £600,000⁵.

The two schemes are often confused with the Help to Buy equity loan, which is a different product with a different shape. Under the equity loan, a 20% government loan allowed the buyer's deposit to be reduced to 5%⁴, and in England the scheme applied to new build homes with a maximum value of £600,000¹¹. The equity loan is a loan against the property; the mortgage guarantee was an insurance policy for the lender. A buyer could, in principle, have used both, but they did different jobs.

Where the guarantee did not apply

The Help to Buy mortgage guarantee was a UK-wide scheme, and the 2021 Mortgage Guarantee Scheme also ran throughout the United Kingdom². That is not true of every scheme in this area, and the differences catch people out.

The Help to Buy equity loan applied to England only⁴, and it is no longer available in England or Scotland⁷. Scotland, Wales and Northern Ireland run their own arrangements instead. In Wales, Help to Buy is a shared equity loan scheme for homes up to £300,000 from 1 April 2023, for first-time buyers and home movers who have a 5% deposit¹², and buyers must provide a minimum 5% deposit¹³. Homebuy in Wales is not available in all areas, and where it is available the scheme is subject to local eligibility criteria¹⁴.

In Scotland, the New Supply Shared Equity scheme helps people buy a new build home from a council or housing association¹⁵. It is only available on new build homes, and applicants must show they cannot afford to buy a new build home without help⁷. Once you have applied, the social landlord writes to tell you whether you qualify and what the next steps are¹⁶.

Northern Ireland has its own Help to Buy mortgage guarantee guidance, which confirms the guarantee protected the lender against losses and that the scheme closed to new loans on 31 December 2016¹.

Was the scheme only for new build homes?

NewBuy was built around newly built homes, and the Help to Buy equity loan that ran alongside it was limited to new build homes in England¹⁸. The later 2021 Mortgage Guarantee Scheme was not restricted in that way: it was open to eligible first-time buyers and home movers buying an eligible home, with the £600,000 price cap as the main limit².

That distinction still matters when you read about schemes today, because the new build restriction is what makes some of them narrow. The New Supply Shared Equity scheme in Scotland is only available on new build homes⁷. Help to Buy in Wales is a shared equity loan scheme for new build homes¹². If you are looking at an older property, those routes are closed to you regardless of your deposit.

There is a separate layer of protection that applies to new build homes specifically, and it is not a government guarantee. New home warranties cover structural defects for a set period, and the policy documents for one major provider state that cover under the Approved Inspector building control section only applies in England and Wales¹⁹. That is a warranty against defects in the building, not against your mortgage payments.

Options for buyers with a small deposit after the scheme ended

The schemes that replaced the guarantees are mostly shared equity or shared ownership arrangements, and they work differently from a mortgage guarantee. Instead of insuring the lender, they reduce the amount you need to borrow, usually by taking a share of the property.

In England, the government announced a new first-time buyer scheme with a 2.5% deposit, a 20% government-backed equity loan and a 77.5% mortgage for new build purchases¹⁸. In Wales, Help to Buy continues as a shared equity loan, and an extension was expected to give up to 400 more households the opportunity to purchase a new build home with a smaller deposit²². In Scotland, the New Supply Shared Equity scheme remains available on new build homes for buyers who cannot buy without help¹⁵.

Outside the scheme routes, the mortgage market itself has moved. No-deposit, 1% and 2% deposit mortgages are available to first-time buyers who meet the affordability checks²³. First-time buyers accounted for more than half of all mortgage sales in 2025, at 52.8%²⁴, which tells you how much of the market is now built around buyers with smaller deposits.

What protects a buyer with a small deposit

The protections that matter most to a high loan-to-value buyer are not the guarantee schemes. They are the rules on how a lender assesses you, and the routes open to you if something goes wrong.

Lenders must carry out an affordability assessment before agreeing a mortgage, and the conduct rules exempt only narrow cases, such as a replacement contract with no additional borrowing beyond financing a product or arrangement fee, or a variation where there is no material change to the affordability terms¹⁰. The Mortgage Charter sets out commitments from lenders on how they handle borrowers in difficulty, and those commitments do not apply to Buy to Let mortgages²⁵.

If you fall behind, the first step is to talk to your lender, and free help is available. Mortgage payment protection insurance is one option, covering payments if you cannot pay for certain reasons, for example if you are sick or made redundant¹⁷. It is worth being clear about what a mortgage indemnity guarantee is, because the name sounds like protection for you: it protects the lender against loss if you borrow a high proportion of your property's value and cannot repay the mortgage²⁶.

Where the protection stops is at the point of your own liability. A guarantee, an indemnity policy or a warranty on the building does not pay your mortgage. If you are struggling, free and impartial help is available from Citizens Advice and from the money advice services, and your lender's own arrears team is the first call.