Mortgage question
Is Deposit Unlock better than Freedom to Buy?
For most buyers, Freedom to Buy wins. It works on resale and new-build homes, uses a wider lender panel, and prices 0.2–0.5 percentage points cheaper than Deposit Unlock. Deposit Unlock only makes sense if you’re buying a new build from a participating developer, particularly above the £600,000 Freedom to Buy cap.
What’s the core difference?
The core difference is property type and who underwrites the top-slice risk. Deposit Unlock is a new-build-only scheme funded by an insurance premium the housebuilder pays — it’s designed to help developers shift unsold stock, so it only applies on new builds from participating developers. Freedom to Buy is the government’s permanent 95% LTV guarantee launched in 2025; it works on any qualifying property (new build or resale) up to £600,000 through any lender on the scheme.
Both exist to make 5% deposits viable in a market where lenders would otherwise need much larger buffers. They just solve the problem differently.
Which is cheaper on rate?
Freedom to Buy is usually cheaper. Deposit Unlock rates in April 2026 typically run 0.2–0.5 percentage points above equivalent 95% LTV Freedom to Buy products because the developer’s insurance premium feeds into the lender’s pricing.
| Scheme | Typical 5-yr fix (95% LTV, Apr 2026) | Max loan | Property eligibility |
|---|---|---|---|
| Freedom to Buy | ~5.60% | £570,000 (product); £600k purchase cap | Resale or new build |
| Deposit Unlock | ~5.85–6.05% | ~£750k Nationwide, ~£600k Accord | New build only, participating developer |
| Standard 95% LTV | ~5.60–5.75% | Lender-dependent | Resale or new build |
On a £237,500 loan over 30 years, a 0.4pp premium costs you roughly £55 extra a month — around £660 a year. Over a 5-year fix that’s £3,300. See the mortgage comparison calculator to run the numbers on specific deals.
Which has the wider lender panel?
Freedom to Buy has the wider panel. Major high-street lenders including Halifax, Nationwide, Santander, Barclays, NatWest, Virgin Money and HSBC participate in Freedom to Buy in April 2026. Deposit Unlock in April 2026 has a narrower list — Nationwide, Accord, Halifax and Newcastle BS are the main participants (verify current list with the developer before relying on it). Narrower panels mean less competition on rate and fewer backup options if your first application hits a snag.
When would I actually pick Deposit Unlock?
Pick Deposit Unlock only if three things are true: you want a new build, the developer is on the scheme, and you’re buying above £600,000 (so you’re over the Freedom to Buy purchase cap) or you specifically need Nationwide’s £750k max loan. Otherwise, you’ll usually save money on Freedom to Buy — even on the same new build. See Freedom to Buy scheme guide and Deposit Unlock scheme guide for the full eligibility detail.
Common misconception: “Deposit Unlock means the developer is giving me the deposit”
Deposit Unlock does not give you anything. You still put down your own 5% deposit. The developer simply pays an insurance premium to the lender to cover some of the top-slice default risk, which allows the lender to underwrite at 95% LTV. You, the buyer, pay the mortgage as normal — you don’t owe the developer anything extra afterwards. Information, not regulated advice.
Sources
Information, not regulated advice. Mortgage Notes is not an FCA-authorised mortgage adviser. For a recommendation on your specific circumstances, speak to an FCA-authorised broker.