unlocking homeownership
HELP TO BUY
MORTGAGES
tell me about
HELP TO BUY
Mortgages
Are you dreaming of owning your own home but finding it challenging to save up for a hefty deposit?
Help to Buy mortgages could be the key to unlocking your dreams of home ownership. Designed to make it easier for first-time buyers and existing homeowners to purchase a new-build property, the Help to Buy scheme offers a range of benefits that can turn your aspirations into reality.
The Help to Buy scheme typically provides an equity loan of up to 20% (40% in London) of the property’s value, making it easier for you to secure a mortgage with just a 5% deposit. This government-backed initiative allows you to borrow the remaining amount from a mortgage lender, meaning you can move into your new home with a smaller financial burden upfront. For Reference, The Help to Buy Equity Loan ended for all customers on the 31st March 2023.
key features of
HELP TO BUY
Equity Loan Overview
The Help to Buy scheme provides an equity loan directly from the government, which can cover up to 20% of the property’s market value outside London and up to 40% within London. This significant portion reduces the amount that buyers need to borrow from traditional mortgage lenders, thus making it easier to qualify for a mortgage.
Deposit Requirement
With only a 5% deposit required, the Help to Buy scheme considerably lowers the financial barrier for homebuyers. This minimal deposit requirement allows individuals to enter the property market much sooner than they might have been able to otherwise.
Interest-Free Period
One of the most appealing aspects of the Help to Buy equity loan is that it remains interest-free for the first five years. This provides homeowners with an opportunity to stabilise their finances before additional costs come into play. After the initial five-year period, an interest rate is charged starting at 1.75% of the loan’s value, subject to annual increases in line with the Retail Prices Index (RPI) plus 1%.
Eligibility Criteria
The Help to Buy scheme is designed to support both first-time buyers and existing homeowners who wish to purchase new-build properties. The property must be your only home, and you cannot own or part-own another property. In addition, the maximum purchase price for the property is capped, which varies depending on the region of the UK.
Repayment Structure
Repaying the equity loan can be done in several ways: selling the property, remortgaging, or using savings. When the equity loan is repaid, whether partially or in full, the amount repaid is based on the property’s current market value, not the original loan value. This ties the repayment amount to any appreciation or depreciation in the property’s value, adding an element of market risk or reward to the loan.
Financial Planning
With its lower upfront costs and initial interest-free period, the Help to Buy scheme can be a significant benefit to long-term financial planning. Homeowners have the chance to build equity in their property and save on rental payments, making a positive impact on their financial stability and future wealth.
Additional Costs
It is crucial to be aware of additional costs associated with the Help to Buy scheme. These can include management fees or other charges related to the maintenance of the loan. While the equity loan is interest-free for the first five years, planning for subsequent interest payments is essential.
Government Collaboration
The scheme exemplifies a successful collaboration between the UK government and mortgage lenders. This partnership helps to ensure that homebuyers have access to favorable terms, making it easier for them to afford modern, efficient homes.
The Help to Buy ISA scheme closed to new accounts on 30 November 2019, those who already opened a Help to Buy ISA before this date, will be able to continue saving into the account until November 2029 and to claim their 25% government bonus by November 2030.
"Absolutely fantastic service sorting out my new mortgage explained everything so well and go above and beyond to help I would 100% recommend to everyone! Thank you again for all your help"
Lisa Butler - Google Review | March 2025
