New 95% mortgage scheme

A new government-backed mortgage scheme launched yesterday that aims to support banks in offering 95% loans.

This scheme will help first-time buyers and movers struggling to raise big deposits.

As far as the buyer is concerned getting a 95% mortgage through this scheme will be no different from getting a traditional 95% mortgage. But for the lender, this scheme guarantees that the government will help them cover costs if the lender loses money.

I’m hoping to buy somewhere this year, and a friend of mine mentioned that it makes sense to use the 95% mortgage. Do you think this is good advice? Isn’t it better to save for longer and put down a bigger deposit if you can?