Deposit Unlock (2026): What It Was & What to Use Instead
Deposit Unlock let you buy a new-build with just a 5% deposit — but it’s now closing to new completions. If you’ve been counting on it, don’t worry: several routes still offer the same low-deposit start. Here’s exactly how the scheme worked, its status, and the alternatives that remain open.
Quick Answer
Deposit Unlock was an industry-backed scheme that let first-time buyers and home movers buy a new-build home with just a 5% deposit. It worked through housebuilder-funded insurance: developers paid into an indemnity fund (run by the Home Builders Federation and Gallagher Re) that protected lenders, so participating lenders felt comfortable offering 95% mortgages on new-builds — something they’re normally wary of. Unlike Help to Buy, you owned 100% of the property from day one, with no government stake.
Important status update: according to the Home Builders Federation, Deposit Unlock is closing to new completions in April 2026. Existing mortgage offers and customers already in the scheme are honoured, but if you’re only now researching it, you’ll likely need one of the alternatives — a standard 95% mortgage, the Mortgage Guarantee Scheme, newer developer schemes like Own New, shared ownership, or First Homes. The good news: a 5% deposit start is still very achievable. Your home may be repossessed if you do not keep up repayments on your mortgage.
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What Was Deposit Unlock?
Deposit Unlock was a mortgage scheme devised by the housebuilding industry (the Home Builders Federation and its members) in collaboration with mortgage lenders, launched in 2021. Its purpose was simple: let people buy a new-build home with just a 5% deposit, at a time when the Help to Buy equity loan scheme was ending and lenders were reluctant to offer high loan-to-value mortgages on new-builds.
That reluctance is the key to understanding why the scheme existed. New-builds carry a “new-build premium” — like a new car, some of the value can dip the moment you move in — so if a lender had to repossess and sell a brand-new home shortly after completion, they risked not recovering a 95% loan. As a result, new-builds often required 15–25% deposits, ironic given they’re frequently marketed at first-time buyers. Deposit Unlock was built specifically to bridge that gap.
How Deposit Unlock Worked
The clever part was the insurance mechanism, which cost the buyer nothing directly:
The mechanism in plain English
Participating housebuilders paid a levy (a small percentage of each qualifying sale) into a central indemnity insurance fund managed by Gallagher Re. That insurance protected participating lenders against a portion of their losses if a buyer defaulted and the property sold at a shortfall. With that safety net, lenders were willing to offer 95% mortgages on participating new-builds at competitive rates. As the buyer, you simply put down your 5% deposit, took a normal 95% repayment mortgage, and owned 100% of the home — the insurance was entirely between the lender and the insurer and never affected your legal position.
In practice it felt almost identical to taking a standard 95% mortgage: 5% deposit, 95% loan, standard affordability and credit checks. The differences were that it applied only to participating new-build developments, was accessed only through a mortgage broker (not by going direct to lenders), and the property had to fall under the scheme’s price ceiling (up to around £833,250, though individual lenders set their own caps).
Deposit Unlock’s Status in 2026
Deposit Unlock is closing to new completions in April 2026
According to the Home Builders Federation, which ran the scheme, Deposit Unlock is closing to new completions in April 2026. Outstanding mortgage offers at that point will continue to be honoured by the relevant lender, and everyone already in the scheme keeps their mortgage unaffected. But if you’re only now looking into it, it’s likely too late to start a fresh Deposit Unlock purchase — so the sensible move is to look at the alternatives below, which offer the same low-deposit goal through different routes. Always confirm the current position with a broker or the developer, as scheme details can change.
This is worth knowing because a lot of older online content still presents Deposit Unlock as a live, open option. If a developer or adviser mentions it, ask directly whether it’s still available on your specific development and lender — and have a backup route ready.
Who Could Use Deposit Unlock?
For reference (and for anyone who may still complete under an existing offer), the scheme’s criteria were relatively open compared with other schemes:
- First-time buyers and home movers — not restricted to first-timers.
- Owner-occupiers only — you had to intend to live in the property; no buy-to-let or investors.
- New-build homes only, houses or flats, from a participating developer on a participating development.
- No income cap — unlike First Homes or shared ownership, there was no maximum income limit.
- Standard affordability — you still passed the lender’s normal income, credit and affordability checks (typically around 4.5× income).
- 5% minimum deposit from your own savings, a gifted deposit, or sale proceeds.
The Alternatives That Still Work
Here’s the reassuring part: buying with a 5% deposit is still very much possible. The routes that remain open in 2026, depending on your situation:
Standard 95% mortgage
The most direct replacement — a normal 5%-deposit mortgage, available on both new and existing homes. Supported by the government-backed Mortgage Guarantee Scheme, which encourages lenders to offer 95% deals.
Own New (Rate Reducer & Deposit Drop)
Newer developer-backed schemes. Rate Reducer uses a builder incentive to cut your mortgage rate for the first few years; Deposit Drop targets 5%-deposit new-build purchases — effectively picking up where Deposit Unlock leaves off.
Shared ownership
Shared ownership lets you buy a 10–75% share with a deposit on just the share — often even less upfront cash than a 5% deposit on the whole property.
First Homes & other routes
The First Homes scheme offers a 30–50% discount for eligible first-time buyers, and no-deposit and guarantor routes exist for those who can’t reach 5%.
None of these is a like-for-like clone of Deposit Unlock, but between them they cover every situation it served — and several are open on existing homes too, not just new-builds, giving you far more choice of property.
Which Alternative Fits You?
A quick way to think about it, depending on what mattered to you about Deposit Unlock:
| What you want | Best route to look at |
|---|---|
| A new-build specifically, 5% deposit | Standard 95% mortgage or Own New schemes |
| Any home (not just new-build), 5% deposit | 95% mortgage / Mortgage Guarantee Scheme |
| The lowest possible upfront cash | Shared ownership |
| A discount on the purchase price | First Homes (if eligible) |
| Less than 5% deposit | No-deposit / guarantor routes |
| Lower payments early on (new-build) | Own New Rate Reducer |
Because the right answer depends on your deposit, income, whether you’re set on a new-build, and which developments participate in what, this is a genuinely useful moment to talk to a broker — they’ll know which schemes are live right now and which lenders are offering the best 95% deals, saving you chasing a scheme that’s closing.
The bottom line
Deposit Unlock was a smart, industry-funded way to buy a new-build with a 5% deposit — no government stake, you owned 100%, and the housebuilder paid for the insurance that made lenders comfortable. But it’s closing to new completions in April 2026, so for new buyers it’s largely a historical option now. The important message is that a 5% deposit start is still very achievable: standard 95% mortgages (backed by the Mortgage Guarantee Scheme), Own New’s developer schemes, shared ownership, First Homes and no-deposit routes between them cover everything Deposit Unlock did — often with more choice of property. The key is matching the right live route to your situation.
Compare mortgage deals and we’ll match you with an FCA-regulated broker who knows which low-deposit schemes are open right now — free, with no obligation and no fee to you.
Frequently Asked Questions
What is the Deposit Unlock scheme?
Deposit Unlock was an industry-backed mortgage scheme, launched in 2021 by the Home Builders Federation with mortgage lenders, that let first-time buyers and home movers buy a new-build home with just a 5% deposit. Housebuilders funded an indemnity insurance scheme that protected participating lenders, so those lenders were willing to offer 95% mortgages on new-builds — which they’re normally cautious about. Unlike Help to Buy, buyers owned 100% of the property with no government stake. It’s now closing to new completions in April 2026.
Is Deposit Unlock still available?
According to the Home Builders Federation, Deposit Unlock is closing to new completions in April 2026. Outstanding mortgage offers at that point will continue to be honoured, and existing customers are unaffected, but new buyers only now researching it will likely need an alternative. Because scheme details can change and some developments may differ, always confirm the current position directly with the developer or a mortgage broker, and have a backup low-deposit route ready such as a standard 95% mortgage or shared ownership.
How did Deposit Unlock work?
Participating housebuilders paid a levy on each qualifying sale into an indemnity insurance fund managed by Gallagher Re. That insurance protected participating lenders against part of their loss if a buyer defaulted and the property sold at a shortfall, which gave lenders the confidence to offer 95% mortgages on new-builds. As a buyer, you put down a 5% deposit, took a standard 95% repayment mortgage, and owned 100% of the home. The insurance never affected your legal position — it was purely between the lender and insurer.
What can I use instead of Deposit Unlock?
Several routes still offer a low-deposit start. A standard 95% mortgage (supported by the government-backed Mortgage Guarantee Scheme) works on both new and existing homes with a 5% deposit. Own New’s Rate Reducer and Deposit Drop are newer developer-backed schemes for new-builds. Shared ownership lets you buy a share with a deposit on just that share. First Homes offers a discount for eligible first-time buyers, and no-deposit or guarantor routes exist for those who can’t reach 5%. A broker can match the right live route to your situation.
Did Deposit Unlock have an income limit?
No. Unlike Help to Buy, First Homes or shared ownership, Deposit Unlock had no maximum income cap — buyers on any income could use it, subject to the lender’s standard affordability assessment. It was also open to both first-time buyers and home movers, not just first-timers, though it was restricted to owner-occupiers buying a participating new-build home to live in, so buy-to-let and investors couldn’t use it. Buyers still passed normal income, credit and affordability checks, typically borrowing around 4.5 times income.
Can I still buy a new-build with a 5% deposit?
Yes. Even with Deposit Unlock closing, a 5% deposit new-build purchase is still achievable through a standard 95% mortgage or newer developer-backed schemes such as Own New. Lenders remain more cautious about high loan-to-value lending on new-builds than on established homes, so the choice of lender matters, and a broker experienced with new-build mortgages can identify which lenders are most comfortable. Alternatively, buying an existing home with a 95% mortgage gives you a wider lender pool and more property choice.
- Home Builders Federation (HBF) — Deposit Unlock scheme and closure to new completions
- Deposit Unlock (deposit-unlock.co.uk) — scheme details, participating lenders and price cap
- GOV.UK — Mortgage Guarantee Scheme and affordable home ownership schemes
- Lender and developer scheme criteria (Own New, participating 95% lenders) — indicative and subject to change
Important information
nextmove is an introducer, not a lender or adviser. This article is for general information only and does not constitute financial advice. Scheme availability, closure dates, eligibility, price caps and lender criteria are indicative, change over time, and should be confirmed as current before you rely on them — Deposit Unlock is closing to new completions in April 2026 per the Home Builders Federation, and details of alternative schemes vary. We introduce you to FCA-regulated mortgage brokers who can advise on your individual circumstances and the routes currently open to you, and we may receive a fee or commission for doing so.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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