Help to Buy

Help to Buy is a government scheme designed to help people buy a home with a deposit as low as 5%.

You can use Help to Buy to move home, upsize or to get your foot on the property ladder.

There are two options available through the scheme: mortgage guarantee and equity loan.

Mortgage guarantee

Mortgage guarantee helps you buy a home with a deposit of 5% of the purchase price. It's open to both first-time buyers and home movers for new-build and older homes in the UK with a purchase price up to £600,000.

The guarantee is provided to your mortgage lender by the government - not to you.

To qualify for a mortgage guarantee, the home you want to buy must:

  • have a purchase price of £600,000 or less
  • not have a shared ownership or shared equity purchase
  • not own a second home
  • not rent the home out after you buy it

The property doesn't have to be newly built. You don't have to be a first-time buyer and there's no limit on your level of income. But you can't use Help to Buy with any other publicly funded mortgage scheme, or an interest-only mortgage.

Equity loan

Equity loans are open to both first-time buyers and people moving house. The equity loan only covers new-build homes in England with a purchase price up to £600,000.

You won't be able to sub-let your home if you use this scheme. It must also be your only property.

With an equity loan you'll need to contribute at least 5% of the property price as a deposit. The government will then give you a loan for up to 20% of the price. Finally, you'll need a mortgage of up to 75% to cover the rest.

You won't be charged loan fees for the first 5 years of owning your home. In the sixth year, you'll be charged a fee of 1.75% of the loan's value. After this, the fee will increase every year. The increase is worked out by using the Retail Prices Index plus 1%.

Your Help to Buy agent will contact you before the fees start, to set up monthly payments with your bank. You'll also be sent a statement about your loan each year. Fees don't count towards paying back the equity loan.

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