Frequently asked questions

Who is eligible for Help to Buy?

The Help to Buy Equity Loan scheme and Mortgage Guarantee schemes are available to both first time buyers and existing home owners. You will need a minimum 5% deposit to qualify. There is no maximum household income to qualify for the scheme, and you can purchase a property with a maximum value of £600,000 in England, £300,000 in Wales and £230,000 in Scotland.

The Help to Buy Equity Loan scheme is exclusive to new-build homes only. Help to Buy Mortgage Guarantee is available for new-build homes and existing properties. 

Where is the Help to Buy scheme available?

The Help to Buy Equity Loan scheme is available in England, Scotland and Wales. The maximum value of the property you can purchase with the scheme differs depending on where in the UK you live. In England, you can buy a property up to a value of £600,000. In Wales, it is limited to £300,000 and in Scotland the limit is £230,000. 

How does Help to Buy Equity Loan work?

With Help to Buy Equity Loan, you only need a minimum deposit of 5% of the value of your new home. The government lends you an equity loan of up to 20% of the value of your home (15% in Scotland, 40% in London), so you’ll only need a 75% mortgage (80% in Scotland, 55% in London). You will not be charged any loan fees on the equity loan for the first five years of you owning your home.

The Help to Buy Equity Loan scheme has been extended until 2021 through a further £8.6 billion in Government funding[1]

[1] source: gov.uk

How does Help to Buy Mortgage Guarantee work?

With Help to Buy Mortgage Guarantee, you only need a minimum deposit of 5% of the value of your new home. The government will then provide a guarantee to the mortgage lender for up to a further 15%, which offers lenders peace of mind when lending to those with a smaller deposit. The ‘mortgage guarantee’ is an arrangement between the lender and the government. You will then need to secure a 95% mortgage from a mortgage provider.

The Help to Buy Mortgage Guarantee scheme is available until 31st December 2016.

What’s the difference between Equity Loan and Mortgage Guarantee scheme?

Help to Buy Equity Loan is available exclusively for the purchase of new-build properties. The government provide you with an equity loan, reducing the size of the mortgage required to purchase your new home.

Help to Buy Mortgage Guarantee is available on new-build and existing properties. The government provide a guarantee to the mortgage lenders for up to 15% of your mortgage. This enables the mortgage lenders to be able to offer a 95% mortgage.

With both and Help to Buy Equity Loan and Help to Buy Mortgage Guarantee, you only require a 5% deposit to purchase your new home.

How long will the Help to Buy scheme run for?

The popular Help to Buy Equity Loan scheme has been extended until 2021 through a further £8.6billion in government funding [1].

Help to Buy Mortgage Guarantee is available until 31st December 2016.

[1] source: gov.uk

Is Help to Buy a shared ownership scheme?

No. With both Help to Buy Equity Loan and Help to Buy Mortgage Guarantee, you purchase 100% of your home and legally own 100% of your home. 

Can I pay off the equity loan before the end of the first 5 years?

Yes. Once you have purchased your home, you can choose at any time to make voluntary part repayments or a full repayment, based on the market value at that time. The minimum voluntary repayment is 10% of the market value at that time.