With a UK Rent to Buy scheme, you usually do not need a deposit to move into the property as a tenant. The aim is to rent the home at below market rent so you can build savings for a future mortgage deposit. The deposit only becomes relevant when you are ready to buy the property. At that point, many lenders may accept deposits from 5%, although the exact amount depends on your income, credit history and the property. For example, on a £200,000 property, a 5% deposit would be £10,000. One important point is that the purchase price is normally based on the market value when you buy, not when you first move in, so your target savings may need to adjust over time. At Spolton Mortgages, we would usually help you work backwards from the likely purchase value so you have a realistic savings target.
Your home/property may be repossessed if you do not keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.
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