2021 Getting a mortgage during Covid-19 | What’s changed? And what to do about it…

What happened in 2020 that affected mortgages?

2020 was tough for the mortgage market. Many lenders pulled out of low-deposit products, and interest rates increased. However, going into 2021, there is renewed optimism.

Are 10% deposit mortgages available again?

Yes. 10% deposit products have started to return. Initially, they were offered only to first-time buyers, but towards the end of 2020, some lenders extended them to home movers as well. This is positive news, especially with the stamp duty holiday still in place.

What about 5% deposit mortgages?

At the moment, there are no 5% deposit mortgage products available. However:

• The Prime Minister announced at the Conservative Party Conference that the government plans to bring back 5% deposit mortgages.
• No formal details have been released yet, but many first-time buyers are waiting eagerly.

Is the Help to Buy scheme still available?

Yes, but with changes:

• It is available up to March 2021 in its current form.
• From April 2021, the scheme will only be open to first-time buyers.
• Regional price caps will apply, so fewer buyers will be eligible outside of London.

What’s happening with the stamp duty holiday?

The stamp duty holiday is due to end on 31st March 2021.

• Buyers can save up to £15,000 on properties worth £500,000.
• There is hope for an extension due to the ongoing lockdown, but no confirmation yet.

Will the housing market remain strong in 2021?

In the first quarter, yes. Demand remains high because of the stamp duty holiday. If the holiday is extended, the market may stay buoyant longer. The government recognises that when the housing market moves, other industries (mortgage brokers, solicitors, builders) benefit too.

How is remote working affecting buyer behaviour?

Many buyers now want:

• More space for home offices
• Homes outside big cities like London
• Properties closer to parks and green areas

This trend reflects the shift to working from home and lifestyle changes during lockdown.

Are people saving more money during lockdown?

Yes. Savings have increased due to:

• No commuting costs
• Less entertainment spending
• Lower childcare expenses

Many are putting these savings toward deposits or mortgage repayments.

What about buy-to-let investors?

Buy-to-let is still active, with some stamp duty savings available.

• Increasingly, investors are buying properties through companies (SPVs) rather than personally.
• Reason: Mortgage interest is no longer tax-deductible for individuals, but company structures remain more tax-efficient.

How is mental health influencing housing choices?

Buyers now prioritise:

• Garden space
• Proximity to parks
• Homes with balconies or outdoor areas

Lockdowns highlighted the importance of mental well-being, and this is now a key factor in property decisions.

What’s happening with the furlough scheme?

The furlough scheme currently runs until April 2021.

• The government may extend it if COVID-19 disruptions continue, but no confirmation yet.
• Past trends suggest extensions are possible.

How have the self-employed been affected?

Many self-employed workers, especially in hospitality, have seen incomes fall. While government grants helped, mortgage implications remain:

• Banks assess income using self-assessment tax returns (SA302s).
• Contractors with limited companies should take dividends where possible, as declared income will affect future mortgage eligibility.

How can WIS Group help borrowers in 2021?

WIS Group offers:

• Free consultations
• Fintech tools to compare mortgages online
• Full support via Zoom or Skype
• Personal advice for buying or remortgaging in 2021

Any final reminders for borrowers?

Yes:

• Not all products or advice will be suitable for everyone speak to a mortgage advisor first.
• Remember: Your home may be repossessed if you do not keep up with mortgage repayments.