Help To Buy

Help to Buy is a government-backed initiative designed to assist first-time homebuyers and existing homeowners in purchasing a property with as little as a 5% deposit. The scheme offers equity loans and other financial support to make homeownership more accessible in the property market.

What is Help To Buy?

The Help to Buy scheme is a cornerstone of government efforts to stimulate the property market and make homeownership more achievable for a broader segment of the population. Initially launched in the UK, similar programs have been introduced in various countries with the same aim of supporting buyers who might otherwise struggle to secure a mortgage.

Under the Help to Buy equity loan scheme, the government lends buyers up to 20% (40% in London) of the cost of a newly built home, so they only need to provide a 5% cash deposit and secure a 75% mortgage to cover the rest. This loan is interest-free for the first five years, making it an attractive option for many potential homeowners.

The Help to Buy scheme has evolved over time, with different versions targeting specific buyer groups and housing sectors. Its main goal remains to reduce the upfront costs associated with purchasing a home, thereby lowering the barrier to entry for first-time buyers and encouraging movement within the housing market.

Related

Mortgage Advisor
Independent Financial Advisor (IFA)
Mortgage
First Time Buyer

Frequently Asked Questions

Help To Buy is a term that you may have heard before, but you might not be sure what it means. Here are some common questions and answers to help you understand what it means.

Eligibility for the Help to Buy scheme typically requires that you are a first-time homebuyer or an existing homeowner looking to move. The property you wish to purchase must be a new build, within a certain price limit, and intended as your primary residence. Specific eligibility criteria can vary based on the scheme's current rules and regional adjustments.
The equity loan provided under the Help to Buy scheme covers up to 20% of the purchase price (up to 40% in London), interest-free for the first five years. After this period, interest is charged on the loan, starting at a low rate and potentially increasing over time. The loan must be repaid when you sell the home or at the end of the mortgage period, whichever comes first, and the repayment amount is based on the property's current value.
The Help to Buy equity loan must be combined with a repayment mortgage from a qualified lender. While you're free to choose your mortgage provider, the mortgage must meet specific criteria set out by the Help to Buy scheme, such as being on a repayment basis and not exceeding certain terms and conditions. It's advisable to consult with a mortgage advisor or the Help to Buy agent in your area to ensure your mortgage is compatible with the scheme.
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