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MI New Home details

Please note that the MI New Home scheme closed to new applications on 31 March 2015. This page is provided for reference only

Who can access the scheme?

MI New Home is available to all creditworthy borrowers who meet lenders usual affordability and underwriting processes and a number of specific eligibility criteria.

Those applying for a mortgage under the scheme will be subject to exactly the same checks and lending criteria as would usually be the case when applying for any mortgage product. The Council for Mortgage Lenders has published a helpful guide on what you need to know when considering a MI New Home mortgage. As with all schemes related to homeownership, we would advise that prospective borrowers take advice from an independent financial advisor (IFA).


What are the benefits of the scheme?
  • The scheme enables credit-worthy borrowers access to 90 to 95% loan to value mortgages to credit worthy borrowers which means a much lower level of deposit is required than for many other mortgages currently available. The scheme is not restricted to first-time buyers and, subject to certain eligibility criteria, is open to anyone looking to buy a new home who is finding it difficult due to the level of deposit usually required by lenders.
  • As many as 6,000 new home purchases could be supported over the three-year period of the scheme.


Who is selling homes under MI New Home?

Twenty-seven home builders have signed up for the scheme, providing a range of flats and houses at selected development sites throughout much of Scotland. They are:

A&J Stephen Mactaggart & Mickel
Bancon Homes Mansell Homes
Barratt Homes Merchant Homes
Bellway Homes Miller Homes
Bett Homes Muir Homes
Chap Homes Ogilvie Homes
Charles Church Persimmon Homes
Cruden Homes Scotia Homes
David Wilson Homes Springfield
Deveron Homes Stewart Milne Homes
Discovery Homes (Scotland) Ltd Story Homes
Dundas Estates Taylor Wimpey
Kier Homes Tulloch Homes
Lovell Partnerships Ltd  


Which lenders are involved in the scheme?

Currently Nationwide Building Society and Royal Bank of Scotland are participating in the scheme. Although the Scottish Government is supporting the scheme, lenders and developers will form their own commercial agreements.


What are the main eligibility criteria for the scheme?

In order to be eligible to apply for a loan supported by the scheme:

  • The property must be a new-build property in Scotland and constructed by a builder who has signed up to the MI New Home scheme.
  • The price of the home cannot be more than £250,000.
  • The property has to be the applicants main home (not a second home or buy-to-let).
  • The property cannot be bought through any shared ownership or shared equity schemes e.g. the Scottish Government's Low Cost Initiative for First Time Buyers (LIFT).

  • Applicants for loans under the scheme must be UK citizens or have indefinite leave to remain in the UK at the time the loan is made.
  • Applicants must have deposits of 5% or more of the sales price without any assistance from a local authority or public body.


What is an indemnity and how does it affect a borrower?

A mortgage indemnity protects the lender if, at some future stage, a borrower falls behind with their mortgage payments and the lender has to repossess the property and sell it. This can result in a loss to the lender if the property has to be sold for a value lower than the remaining value of the mortgage.

Under MI New Home, each home builder puts aside a proportion of the sale price for each home into a special indemnity fund.  If the property is repossessed and sold for less than the amount of the outstanding mortgage debt during a seven-year period, the lender can claim from the fund to recover some of its loss. When the indemnity set aside by the home builder is exhausted, the Scottish Government provides a further guarantee to an agreed level.

The basic security for the mortgage is the property. The mortgage indemnity, therefore, acts as a form of additional security for the lender.

It is important to note that the existence of the indemnity does not provide any additional protection for the borrower, nor protection from repossession.  If a property is repossessed, the borrower will still be responsible for repaying any shortfall between the sale price of the property and the outstanding mortgage debt.


How can I apply for a mortgage?

Prospective home buyers can either visit a participating new-build development or a mortgage lender in the scheme to discuss eligibility. For some lenders, you can also approach a mortgage intermediary who is introducing mortgages under the scheme.