The new scheme comes after a dramatic decline in the number of 95 per cent LTV mortgages available since the pandemic.
Data from Moneyfacts showed there were five products at the start of last month, compared to 405 at the start of February 2020.
The new mortgage guarantee scheme will be based on a previous version that launched in 2013.
According to the Treasury, from October 2013 to June 2017, the previous mortgage guarantee scheme helped to increase the number of 95 per cent LTV products available from 43 to 261.
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