Mortgages offered to some first-time buyers under a Government scheme to help them get a foot on the housing ladder will be charged at higher interest rates than mainstream homeloans.

 The Government has confirmed that mortgages offered – in the main to key workers – via its Open Market Homebuy scheme to be launched in October, will be more expensive than typical home loans.

In a written Commons answer, the Government said discussions were continuing with the three lenders involved, but that they are ‘likely to charge a small premium on the interest rate of a typical mortgage’.

Mortgage experts said rates could be almost one percentage point higher than on a typical mortgage.