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Key-worker Mortgages: finding a suitable deal
There are many UK jobs that are critical in our society, and as an expression of gratitude to people in these roles you can often find unique deals and discounts on many products and services. Mortgages are an important part of this, so let’s explore how Key-workers can take advantage of these offers when buying a home.
Who is classified as a Key-worker?
Key-workers are those performing essential jobs for the UK, typically including roles within the NHS, police officers, fire fighters, teachers, plus jobs in the armed forces, agriculture, local authorities and the justice system.
The specific definition of a Key-worker can vary depending on the context.
What is a Key-worker Mortgage?
Today there are no official Key-worker mortgage schemes led by the government. However, many lenders do offer special offers and discounts to people that hold a Key-worker role. Offers can include reduced fees, preferential rates and relaxed criteria.
Eligibility can vary depending on the lender. For example, some lenders will include Doctors in NHS mortgage discounts, while others won’t. To identify the deals that will apply to you, talk to a Mortgage Broker. You will need to provide evidence to mortgage lenders of your role and employer.
What government schemes support Key-workers?
The government is aware that Key-workers can often find it challenging to buy a home, especially in London and other large UK cities. There are now a number of schemes designed to make it easier for First Time Buyers and Key-workers to secure a mortgage and get on the property ladder. These include:
Help to Buy Equity Loan
The Help to Buy Equity Loan is only open to First Time Buyers on new build homes. It involves a government loan to boost your deposit from 5% to 25%, which reduces the monthly repayments on your mortgage. The loan is interest-free for five years.
Right to Buy
Right to Buy is a scheme for people living in council homes, entitling you to buy your home with a significant discount. The longer you have been a council tenant, the bigger the discount, with the maximum amount reaching £84,600 (or £112,800 in London).
The first step in applying for Right to Buy is to contact your local authority and find out the size of discount that you may be eligible for.
With Shared Ownership you can part-rent, part-buy a home. The minimum starting point is to buy a 10% share in a home, paying rent on the rest. You can increase the share of your home over time. It is important to seek mortgage advice on how to fund the bought proportion of the property.
This is a new government scheme to make it easier to buy a first home in your local area. First Homes will be made available over the coming months and years, with the first housing development now live in Bolsover, East Midlands. Local authorities will prioritise Key-workers for these new homes.
First Homes are sold with a discount of 30% on the market price, saving each buyer an average of £70,000. In some areas the discount could be as high as 50%, providing even greater savings. The discounts will apply to the homes forever, meaning that this discount will apply every time the property is sold in future.
How can a Mortgage Broker help me?
Navigating the different schemes available can be complex, as is exploring the potential discounts you can access from various lenders. A Mortgage Broker can help you compare all the options that are relevant to your specific situation.
Not only will we recommend suitable government schemes, but we will explore the mortgage options on your behalf, comparing mortgage rates, criteria and fees to find you an appropriate deal. We support you at every step, through the mortgage application and beyond – offering friendly, helpful guidance and answering any questions that you may have.
Choice Finance Mortgages & Financial Solutions Limited is an appointed representative of PRIMIS Mortgage Network. PRIMIS Mortgage Network is a trading style of First Complete Ltd which is authorised and regulated by the Financial Conduct Authority. We are registered in England.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Neither Choice Finance Mortgages & Financial Solutions Ltd or PRIMIS Mortgage Network is responsible for the accuracy of the information contained within the above linked sites.
Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.