Help To Buy Mortgage

Help To Buy Mortgage

How Does Help To Buy Mortgage Work?

The Help to Buy mortgage – also known as an Equity Loan – can be used by both first time and existing buyers to move up the property ladder.

In a nutshell, Help to Buy lends qualifying buyers up to 20 per cent of the value of the house they intend on buying. This percentage can even be higher, depending on your location.

In addition to the equity loan, buyers will have to come up with 5 per cent of the house value as a deposit, and another 75 per cent mortgage from a commercial lender. With this in place, you should be ready to buy your house.

However, keep in mind that the current government Help To Buy scheme is set to end on 31 March 2021. Afterwards, a new Help to Buy Equity Loan scheme will be implemented with updated eligibility requirements and price capping.
The new Equity Loan on 1 April 2021 will be limited to first-time home buyers, so if you already own a property and want to utilise the benefits of the current equity loan scheme, you must apply before 31 March 2021.

Get Expert Help To Buy Mortgage Advice

All firms are regulated by the Solicitors Regulation Authority or the Council for Licensed Help To Buy

Help To Buy
0800 009 6634
1st Floor, Suite 2, 40 Charlotte Square, Edinburgh, EH2 4HQ
Rated Excellent
Based on 1,206 reviews
Understanding & listened to our requirements

We found so far that they listen & understand our requirements, all ways available to answer any questions that we have had. Like most people who only get chance to check emails after work, when sent or responded to there emails they answer promptly at evenings & weekends. This is the 3rd time we have used the mortgage company and they meet our requirements.

Steve & Amy
Caroline & Nasreen were both very…

Caroline & Nasreen were both very informative and kept me updated all the way through. I had full trust in them right from the beginning. Would definitely recommend and hope to work with them again in the future.

I was supported right from my first…

I was supported right from my first contact. I am going through a divorce and needed quick responses...I was accommodated and supported at all times. My Account Manager Fiona has gone above and beyond her required services.

Tanya Geldard
Well what can I say from start to…

Well what can I say from start to finish I have had exemplary service Suzy and her team have been amazing keeping my spirits up when I needed a boost and such a friendly knowledgeable manner I would certainly recommend to friends and family and would use again but sincerely hope I don’t need to.

Karen Rich
Fantastic service from Jo and Matt

Fantastic service from Jo and Matt. We have been struggling for a few years to get a mortgage but Jo was able to achieve this for us. We are really grateful.

Mrs Marais
Excellent service as usual

Excellent service as usual! Matt and Jodi are amazing! Thank you soo much for your help and answering my crazy questions.

Lisa Tilbrook
First Class Customer Service

Just completed on my first home. A massive thank you to Chris Summerson who found me exactly the mortgage deal I was looking for. Professional and friendly service throughout.

Graham Holbrook
Absolutely Outstanding Service

Jodi has been utterly brilliant and the service provided absolutely perfect, worth every penny. I urge any first time buyer to use The Mortgage Broker Ltd, it just takes all the stress and confusion out of the process and gives you access to an expert who can answer all of your questions honestly and with ease.

Alex H
Such a Positive Experience!!!

Such a positive experience!!! Would recommend it to anyone. Oliver had so much patience with me what is much appreciated. Guys are happy to answer all your questions and are happy to help / explain all documentation which I always struggle with. I'm hoping to hear from them again in about 18 months . Thank you Oliver!

Gosia Olejnik
Excellent and Fast Service

We used the mortgage broker to source a remortgage for our buy to let property. They were very professional and we were very delighted with the deal and service we got from them. Fiona and Becca also kept us updated on the progress of the application and we were able to complete the whole process under 30 days. Highly recommend them to anyone looking for a mortgage broker.

Ade G

Get Expert Help To Buy Mortgage Advice

Your details are not shared with anyone other than the firms who are providing the quotes and we operate a strict no spam policy.

Help to Buy Last Month
We’ve helped over
save on average
2,000per instruction*
Our Solicitors Are Regulated By
- Solicitors Regulation Authority
- Council for Licensed Help to Buy
Fully Compliant
Credit Checked

The Advantages Of Help To Buy Schemes

Help to Buy mortgages have become popular among home movers and first-time house buyers. The government introduced these schemes in an effort to give new buyers a chance to get themselves on the property ladder. Help to Buy schemes also help the wider economy, boost the housing market, and help to sell new build homes.

Help to Buy allows you to purchase a property with a smaller deposit than usual, making purchasing homes more manageable and cheaper.

For most first-time buyers, taking out a large mortgage to cover the full value of a home can be financially demanding. Houses are relatively expensive in the UK, and a huge amount of borrowing will mean paying a large amount of interest too.

But with the Help to Buy mortgage scheme, you only need a small deposit from your savings. The government lends you 20 per cent of the house value, and the remaining 75 per cent is paid with a mortgage loan from a commercial lender. This 75 per cent is much lower than taking out a loan equivalent to 100 per cent of the house value.

Since your mortgage will be smaller, you can more easily meet the requirements and secure the loan for your home. It is also easier for you to get a more competitive interest rate than on a 95 per cent mortgage.

With that said, you are actually borrowing money from two different parties: the government and a commercial lender. After you have bought your home, you still have the responsibility to cover the monthly mortgage payments from your lender. However, since you only took a smaller loan, your monthly repayments will be much more affordable.

On the other hand, the loan from the government does not require you to pay any interest during the first five years.

The Equity Loan is considered one of the best Help to Buy mortgages since buyers have the opportunity to pay a lower mortgage rate for the first five years. However, it is advisable to pay the Equity Loan as soon as possible to make the most of the borrowing.

Also, even though you have no equity loan fees due within the first five years, the amount that you must repay can still increase during this period. This is because the repayment value equity loan from the government is based on a percentage share of your property value. So it, too, rises and falls with the housing market. As your property’s value increases, so will the amount that you need to repay.

What Happens After Five Years?

During the first five years, the Equity Loan from the government remains interest-free. However, you will need to pay a £1 management fee by Direct Debit every month.

After five years, you will continue paying the £1 monthly management fee, with an additional 1.75 per cent interest of the equity loan. This interest will increase every year in April based on the RPI or Regional Price Index, plus 1 per cent until you pay back all the Equity Loan.

You are required to repay the Equity Loan in full when you sell your home, pay off your mortgage, or come to the end of your equity loan term. You may repay your Equity Loan at any time you’d like, either in 10 per cent increments or in full before the loan period ends.

Finally, keep in mind that your Equity Loan is fixed as a percentage of the value of your Help to Buy house. This means that the amount of money you borrowed may be different from the final amount you must pay back.

For instance, if the value of your Help to Buy property rises, the Equity Loan that you have to repay may also increase. Because of this, many people choose to remortgage their Help to Buy Equity Loans to take advantage of lower interest rates.

Help to Buy Mortgage Eligibility

First-time buyers and homeowners who want to move to a better home should first find a property to purchase with a value not exceeding £600,000. The house must also be newly built and not an existing property. Help to Buy purchasers are also forbidden to rent out or lease the property to tenants after they buy it.

The government only accepts candidates who can demonstrate they are able to afford the monthly fees and interest payments. Home movers also shouldn’t enter a part exchange deal on their previous home.

This scheme is only available in England, with the Welsh, Northern Ireland, and Scottish Government running similar schemes but with varied price cap and eligibility requirements.

No matter how advantageous this scheme is, you should know all the details before applying. Talk to Help to Buy for more information or any queries.


How do I apply for Help to Buy?

First, you should reserve your chosen property from a registered house builder; this is likely to involve a reservation fee. Afterwards, seek advice from a Help to Buy agent and other professionals like your Help to Buy mortgage advisor who will help you apply for an Equity Loan.

What size deposit do I need for a Help to Buy mortgage?

You should have at least 5 per cent of the house price available as a deposit before applying for a Help to Buy Equity Loan. You can come up with a deposit either from your savings or by getting a loan. If you want to know more about the government assistance for property purchase, give us a call today!

Do you need a special mortgage for Help to Buy?

Yes, you should first secure a mortgage that is at least 75 per cent of the house’s value before applying for an equity loan scheme for properties.

There are a few other conditions that must be met too. For example, the property must be a new build and located in the UK.

Can I put down more than 5 per cent deposit with Help to Buy?

Yes, you can raise more than 5 per cent deposit, though it is recommended that you discuss this matter with a financial advisor and a Help to Buy agent. They will be able to talk through your available options and help you find the best home equity loan scheme to opt for.

Can you negotiate a mortgage rate?

Yes, it is actually possible to negotiate the mortgage or remortgage rate with a commercial mortgage lender.

Who is eligible for Help to Buy?

Here is a list of general eligibility criteria for the Help to Buy Equity Loan:

  • You should be at least 18 years old.
  • You must raise at least 5 per cent deposit of the property’s full purchase price.

Can you do Help to Buy on old houses?

Yes, but only with the Help to Buy Mortgage Guarantee scheme. It allows you to purchase any home worth up to £600,000. However, you can’t buy homes with an interest-only mortgage or part-exchange your existing house for a Help to Buy property.

Can you sell a Help to Buy property?

Yes, you can sell the property that you bought with the Help to Buy scheme. However, you will need to repay the equity loan in full as soon as you sell your home. If you sell it above the original purchase value, you will also have to repay more than you borrowed as the repayment value is fixed as a percentage of the property’s value.

Can I get Help to Buy with Shared Ownership?

Yes, you can apply for a Help to Buy property using the Shared Ownership scheme. This scheme is perfect for those who can’t afford a mortgage on 100 per cent of their dream home. Shared Ownership allows people to buy a 25 to 75 per cent share of the house’s value and pay rent on the remaining share.

Get Expert Help To Buy Mortgage Advice

All firms are regulated by the Solicitors Regulation Authority or the Council for Licensed Help To Buy

Different Help to Buy Schemes

Help to Buy is a government scheme that helps first-time buyers purchase their dream homes or home movers move up the property ladder. There are different kinds of Help to Buy schemes.

First, there’s the current mortgage Help to Buy Equity Loan, which lasts until 2021. This scheme is perfect for both first-time buyers and home movers.

All you need is a deposit of 5 per cent of the house’s full price, and the government will lend you an equity loan. The amount you are entitled to is based on the property value but may vary depending on your location:

  • England – 20 per cent equity loan
  • Greater London – 40 per cent equity loan
  • Scotland – 15 per cent equity loan
  • Wales – 20 per cent equity loan

Secondly, there’s the Help to Buy ISA, which boosts savings that are specifically allocated for your future home. The government adds £50 for every £200 contribution you make.

Lastly, there’s the Help to Buy Shared Ownership scheme that allows you to purchase a 25 to 75 per cent share of a property, while you pay rent on the rest.

Aside from government schemes that help home buyers, there is also the Help to Buy mortgage guarantees scheme that protects the commercial lenders instead of the borrowers.

Give Help To Buy a call for more information.

Tips For First-Time Buyers In Wales

Firstly, what is a Help to Buy mortgage in Wales? The Welsh government allows first-time buyers and even existing homeowners purchase newly built homes through the Equity Loan scheme.

For first time buyers, you must have a deposit of 5 per cent of the property’s full price available to secure an equity loan worth 20 per cent of the house’s price. A traditional mortgage will then be needed to cover the remaining 75 per cent.

After five years, your Equity Loan will begin charging interest. After five years of Help to Buy, remortgage is a good option to consider when deciding to pay back the loan. Call us for more tips and information about Help to Buy government schemes.

Calculating Potential Expenses When Help To Buy Scheme

Before you explore the equity loan scheme for home purchasing, you should first be aware of the expenses you will incur, to ensure you have enough savings to cover the costs. You should expect to encounter the following under this scheme:

  • A deposit equivalent to the 5 per cent of your home’s value.
  • Search fees, stamp duty, legal costs, and telegraphic transfer fees that solicitors usually charge home buyers.
  • Mortgage arrangement set-up fees that mortgage lenders usually charge to acquire the mortgage product or interest rate. Some lenders will also charge mortgage booking fees that usually cost £100.
  • Surveyor fees for a property inspection to ensure that your house has no structural defects.
  • Property valuation fees, which are usually demanded by mortgage lenders to ensure that your house is worth what you are planning to pay for it.
  • Mortgage lenders to inspect your financial status and make sure you can afford monthly mortgage payments, council taxes, and much more.

For more tips and home purchase financial assistance, give our staff a call.