Deposit Unlock: The New-Build Mortgage Scheme Explained
Deposit Unlock lets first-time buyers and home movers buy a new-build home with as little as a 5% deposit, backed by a developer-funded indemnity rather than the government. How it compares to Help to Buy's replacement gap.
Filling the gap left by Help to Buy's closure
The Help to Buy equity loan scheme, which for years helped first-time buyers purchase new-build homes with government-backed low-deposit support, has closed to new applications. Deposit Unlock is one of the mechanisms that has emerged to help fill this gap, taking a fundamentally different approach: rather than the government lending part of the purchase price, it uses a developer-funded indemnity to give mortgage lenders confidence to offer low-deposit products on qualifying new-build homes.
How Deposit Unlock actually works
| Feature | Detail |
|---|---|
| Minimum deposit | As low as 5% |
| Property type | New-build homes only, from participating housebuilders |
| Who funds the indemnity | Participating housebuilders β not the government |
| Buyer eligibility | First-time buyers and home movers, subject to normal lender criteria |
| Future value/repayment | No separate government loan or future value-linked repayment, unlike Help to Buy equity loan |
The core mechanism is an indemnity β essentially a form of insurance protecting the participating lender against losses in specific circumstances β funded by the housebuilder, which gives the lender the confidence to offer a mortgage with a lower deposit requirement than it might otherwise consider for a comparable new-build purchase.
Mortgage Affordability Calculator
Find out how much you could borrow based on your income and outgoings.
Open Mortgage Affordability calculatorDeposit Unlock vs the old Help to Buy equity loan
It's worth being clear about how differently these two schemes actually work, since they're sometimes discussed as if interchangeable:
| Feature | Help to Buy (equity loan, closed) | Deposit Unlock |
|---|---|---|
| Structure | Government equity loan on top of deposit and mortgage | Developer-funded indemnity supporting a low-deposit mortgage |
| Government financial stake in the property | Yes β loan tied to a percentage of the property's value | No |
| Future repayment linked to property value | Yes | No |
| Minimum deposit | 5% | 5% |
Deposit Unlock doesn't give the buyer extra borrowed money in the way the Help to Buy equity loan did β it's purely a mechanism supporting access to a low-deposit mortgage on an eligible new-build property.
Who it suits
- First-time buyers who have a modest deposit saved but would otherwise struggle to access competitive mortgage products at a 5% deposit level on a new-build property.
- Home movers purchasing a qualifying new-build home, subject to the same participating lender criteria.
Normal lending rules still apply
Deposit Unlock reduces the deposit hurdle, but it doesn't change the fundamentals of mortgage lending β participating lenders still assess affordability based on income, existing debts and credit history in the usual way. It's a mechanism for accessing a lower deposit product on an eligible property, not a way to bypass standard underwriting.
Weighing the risks of a low deposit
- Higher loan-to-value mortgages generally carry higher interest rates than lower loan-to-value products, meaning a 5% deposit mortgage will typically cost more per month, relative to the loan size, than the same buyer could achieve with a larger deposit.
- New-build homes have sometimes been observed to command a premium over comparable resale properties at the point of purchase, which can narrow in the period shortly after moving in β combined with a small deposit, this can leave a buyer with limited equity headroom if the property's value doesn't rise as expected in the early years.
- Weigh the benefit of buying sooner against these additional costs and reduced financial buffer, rather than assuming a low-deposit route is automatically the right choice regardless of circumstances.
Practical steps
- Check which housebuilders and developments near you participate in Deposit Unlock, since availability is entirely dependent on developer sign-up.
- Compare the mortgage product terms (rate, fees) offered under the scheme against what you might access with a larger deposit or on a resale property, rather than assuming Deposit Unlock is automatically the cheapest overall route.
- Get an independent valuation perspective where possible on a new-build purchase, given the historic pattern of new-build price premiums narrowing shortly after purchase.
- Confirm your own affordability position with a mortgage broker or lender directly, since normal affordability rules still apply regardless of the reduced deposit requirement.
Frequently asked questions
What is Deposit Unlock?
Deposit Unlock is a mortgage indemnity scheme allowing buyers to purchase a new-build home with a deposit as low as 5%, using an indemnity funded by participating housebuilders (rather than the government) to give participating lenders confidence to offer low-deposit mortgages specifically on new-build properties enrolled in the scheme.
How is Deposit Unlock different from the former Help to Buy equity loan scheme?
Help to Buy (equity loan) involved the government lending a percentage of the property's value (an equity loan) on top of the buyer's deposit and mortgage, which the buyer eventually repaid based on the property's value at repayment β Deposit Unlock works differently, using a developer-funded indemnity to support a low-deposit mortgage rather than the government providing a separate loan, and it doesn't involve the government owning a stake in the property's future value.
Is Deposit Unlock only for first-time buyers?
Not exclusively β while it's particularly relevant to first-time buyers who often struggle most with saving a large deposit, Deposit Unlock is generally also available to home movers purchasing a qualifying new-build property, subject to the participating lender's own standard affordability and eligibility criteria.
Which properties qualify for Deposit Unlock?
Only new-build homes from housebuilders who have specifically signed up to participate in the scheme qualify β it isn't available on resale (second-hand) properties, or on new-build homes from developers not enrolled in the scheme, so availability depends entirely on which developments and housebuilders have opted in.
Do I still need to pass normal mortgage affordability checks?
Yes β Deposit Unlock reduces the deposit required, but participating lenders still apply their normal affordability assessment, credit checks, and lending criteria; it isn't a way to bypass standard mortgage underwriting, just a mechanism that allows a lower deposit than might otherwise be available for a new-build purchase.
Does Deposit Unlock cost the buyer anything extra directly?
The indemnity itself is funded by the participating housebuilder, not charged directly to the buyer as a separate fee, though buyers should still expect to pay normal costs associated with any mortgage (arrangement fees, valuation fees where applicable) and should compare the overall mortgage product terms (rate, fees) against other options, rather than assuming Deposit Unlock is automatically the cheapest overall route.
What are the risks of buying a new-build with only a 5% deposit?
A lower deposit means a higher loan-to-value mortgage, which generally comes with a higher interest rate than lower loan-to-value products, and leaves less headroom if the property's value falls shortly after purchase (a particular consideration for new-build homes, which have sometimes been noted to command a premium over equivalent resale properties that can narrow shortly after purchase) β buyers should weigh the benefit of getting on the property ladder sooner against these additional costs and risks.
Is Deposit Unlock available across the whole UK?
Availability depends on which housebuilders and developments have signed up to participate and which lenders offer mortgages under the scheme in a given area β check the scheme's own current list of participating housebuilders, developments and lenders rather than assuming universal availability across every region and every new-build development.
Try the calculators
In-depth guides
Related reading
Family Springboard Mortgage vs Guarantor Mortgage: Which Helps More in 2026?
Both let parents help a child buy without gifting cash outright, but the mechanics are very different β one locks savings, the other puts the parent's own home or income on the line. A full comparison.
House Extension vs Moving House: The Real Cost Comparison (2026)
Stamp duty, estate agent fees and removal costs vs build costs and disruption β a full worked comparison of extending versus moving to a bigger home in 2026.
First-Time Buyer Property Viewing Checklist for 2026/27
A practical viewing checklist for UK first-time buyers in 2026/27 β what to check, what to ask, and the red flags that could mean expensive surprises later.