Following last week’s meeting with senior executives of major mortgage lenders, the Chancellor, Kwasi Kwarteng, is understood to be considering extending the Mortgage Guarantee Scheme.
Both The Guardian and Financial Times quote sources as saying the Chancellor and the Treasury are now considering an extension to the scheme.
The scheme was relaunched during the pandemic in order to keep 95% loan-to-value (LTV) mortgages available to borrowers.
It allows lenders to secure a guarantee from the Government on a slice of the mortgage between 80% and 95%.
The scheme was slated to end in December but it now looks likely to be extended as the Government looks to maintain mortgage availability at high LTVs.
While the extension will be welcomed by lenders it will do little to help with the inevitable affordability issues set to face borrowers.
Last week saw both 2- and 5-year fixes breach 6% for the first time in over a decade while it has been predicted that rates could top out at 7.7%
