Compare Help to Buy mortgages

Help to Buy mortgages

If you live in Wales, the Help to Buy scheme is still open until March 2025. Add your details and our broker partner Mojo could find the best Help to Buy mortgage rates for you.
YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS. The FCA does not regulate mortgages on commercial or investment buy-to-let properties.
Last updated
May 22nd, 2023

What is the Help to Buy scheme?

The Help to Buy scheme no longer exists for residents in England, Scotland or Northern Ireland. However Help to Buy - Wales is still open to applicants, with the scheme extended until 31 March 2025. The Help to Buy - Wales scheme helps first-time buyers get onto the property ladder and purchase a new build property.

Buyers will need to contribute just 5% deposit from their own money, and then a government loan is added on top of this allowing the buyer to give a larger deposit to the mortgage lender.

This in turn, reduces their loan to value (LTV) ratio, which is the amount you've borrowed from a lender compared to your deposit amount. A lower LTV ratio means you have higher equity in a property, so you're more likely to be offered cheaper mortgage deals.

Users of the scheme can borrow up to 20% of the purchase price of the property from the government.

You must pay off the equity loan within 25 years. The loan is offered on an interest-free basis for the first five years, however, interest will be payable from year six on any outstanding loan amount remaining.


Am I eligible for Help to Buy mortgages?

To qualify for the Help to Buy scheme in Wales you need to:

Buy an eligible home

With a maximum property purchase price of £300,000 from a builder who's registered with the scheme.

Be able to fund at least 80% of the property

Fund the property through the combination of mortgage repayments and a minimum deposit of 5%.

Make mortgage repayments

By taking out a first charge repayment mortgage with one of the registered Help to Buy - Wales lenders.

Not sub-let

You can't sub-let a room in the house that you've bought through the scheme.

Not be renting your existing home

And buying the second property through the Buy to Let mortgage scheme.

Alternatives to the Help to Buy scheme

Shared ownership mortgages

A shared ownership mortgage is another government-backed scheme that helps give first-time buyers across the UK an opportunity to get on the property ladder.

You can usually buy between 10% to 75% share of a property from a housing association. You then pay rent on the remainder of the share left. You can choose to buy more shares in your home in the future to pay less rent, this is known as 'staircasing'.

The rules on shared ownership slightly differ depending on which UK nation you live in, but you can visit the gov.uk shared ownership scheme website for further information.

Guarantor mortgages

Guarantor mortgages is a good option for first-time buyers if you don't have a big enough deposit, have a low income or a bad credit history.

A friend or family member, known as the 'guarantor', won't own any share of your property but are legally responsible for the mortgage repayments if you fall behind.

Family assisted mortgages

A family assisted mortgage is essentially a more modern form of the guarantor mortgage, allowing family members to help you buy your first home.

This can be done by either linking their savings to your mortgage, or by having a joint borrower sole proprietor (JBSP) mortgage sharing the mortgage repayments with you.

The terms that are offered slightly vary between different family assist mortgage products depending on the lender.

Deposit Unlock Scheme

The Deposit Unlock Scheme was introduced by The House Builders Federation allowing both first-time buyers and existing homeowners to buy a new-build home with just a 5% deposit, as opposed to the usual 15% to 25% deposit for new-builds.

This means applicants can access 95% mortgages, but they can only buy from a house builder participating with the scheme as well as participating mortgages lenders which currently are:

  • Accord Mortgages

  • Nationwide Building Society

  • Newcastle Building Society

First Homes Scheme (England)

The First Homes Scheme is available to first-time buyers in England only with a total household income of no more than £80,000 (£90,000 if you live in London).

Developers offer these new-build homes between 30% to 50% below the market value price, and after the discount is applied the property value can't be higher than £250,000 (or £420,000 in London).

If you buy a home through this scheme, you can only sell it to someone else who's eligible for the scheme, giving them the same discount you had.

Homebuy Scheme (Wales)

The Homebuy Scheme is only available in certain parts of Wales, to buyers who qualify for social housing or can't continue living in their current home. The scheme is particularly beneficial to buyers living in rural areas of Wales where there are fewer opportunities to buy a home.

The government gives an equity loan of 30% of the property's value, meaning you'll need to pay the remainder of the 70% through mortgage repayments.

You must repay the equity loan when you sell the home, or before if you can, at the price based on the value of your home at that time.

LIFT Scheme (Scotland)

The Low-cost Initiative for First Time Buyers (LIFT) scheme is available only to either first-time buyers or buyers in priority groups in Scotland.

There are two types of the scheme:

Both schemes allow you to borrow an equity loan from the government, meaning you won't have to put down as large of a deposit and can get a lower loan-to-value (LTV) mortgage.

Alternatives to the Help to Buy scheme

Shared ownership mortgages

A shared ownership mortgage is another government-backed scheme that helps give first-time buyers across the UK an opportunity to get on the property ladder.

You can usually buy between 10% to 75% share of a property from a housing association. You then pay rent on the remainder of the share left. You can choose to buy more shares in your home in the future to pay less rent, this is known as 'staircasing'.

The rules on shared ownership slightly differ depending on which UK nation you live in, but you can visit the gov.uk shared ownership scheme website for further information.

Guarantor mortgages

Guarantor mortgages is a good option for first-time buyers if you don't have a big enough deposit, have a low income or a bad credit history.

A friend or family member, known as the 'guarantor', won't own any share of your property but are legally responsible for the mortgage repayments if you fall behind.

Family assisted mortgages

A family assisted mortgage is essentially a more modern form of the guarantor mortgage, allowing family members to help you buy your first home.

This can be done by either linking their savings to your mortgage, or by having a joint borrower sole proprietor (JBSP) mortgage sharing the mortgage repayments with you.

The terms that are offered slightly vary between different family assist mortgage products depending on the lender.

Deposit Unlock Scheme

The Deposit Unlock Scheme was introduced by The House Builders Federation allowing both first-time buyers and existing homeowners to buy a new-build home with just a 5% deposit, as opposed to the usual 15% to 25% deposit for new-builds.

This means applicants can access 95% mortgages, but they can only buy from a house builder participating with the scheme as well as participating mortgages lenders which currently are:

  • Accord Mortgages

  • Nationwide Building Society

  • Newcastle Building Society

First Homes Scheme (England)

The First Homes Scheme is available to first-time buyers in England only with a total household income of no more than £80,000 (£90,000 if you live in London).

Developers offer these new-build homes between 30% to 50% below the market value price, and after the discount is applied the property value can't be higher than £250,000 (or £420,000 in London).

If you buy a home through this scheme, you can only sell it to someone else who's eligible for the scheme, giving them the same discount you had.

Homebuy Scheme (Wales)

The Homebuy Scheme is only available in certain parts of Wales, to buyers who qualify for social housing or can't continue living in their current home. The scheme is particularly beneficial to buyers living in rural areas of Wales where there are fewer opportunities to buy a home.

The government gives an equity loan of 30% of the property's value, meaning you'll need to pay the remainder of the 70% through mortgage repayments.

You must repay the equity loan when you sell the home, or before if you can, at the price based on the value of your home at that time.

LIFT Scheme (Scotland)

The Low-cost Initiative for First Time Buyers (LIFT) scheme is available only to either first-time buyers or buyers in priority groups in Scotland.

There are two types of the scheme:

Both schemes allow you to borrow an equity loan from the government, meaning you won't have to put down as large of a deposit and can get a lower loan-to-value (LTV) mortgage.

How does Help to Buy work?

When using a standard mortgage to buy a home, you put down a deposit and borrow the rest from a mortgage lender. With the Help to Buy - Wales scheme, you borrow a chunk from the government, interest-free for five years.

The maximum Help to Buy loan available is 20% of a property of a maximum value of £300,000. You add this loan onto your own 5% deposit, giving more to put down initially on the property. The remainder of the cost of the property is what you’ll need to borrow from a mortgage lender.

This may allow you to afford a more expensive home than you would otherwise be able to, as your loan-to-value ratio is reduced by the government loan.

Example for a property worth £250,000:
AmountPercentage
Cash deposit£12,5005%
Government loan£50,00020%
Mortgage£187,50075%

How does Help to Buy work after five years?

If you’ve not repaid the loan within the first five years, interest is charged at 1.75% of the equity loan each month, on top of your loan repayments from the first day of year six. Every April after that, the interest rate rises by the Consumer Prices Index (CPI) plus 2%. 

The Help to Buy equity loan must be repaid in full by whichever of the following deadlines is soonest:

  • The end of the loan term (usually around 25 years)

  • The end of the mortgage term (also typically 25 years) or when you pay it off, if this is before the end of the term

  • When you sell your home

Repayments are calculated based on the current value of your home, rather than the value when you bought it. This means that the percentage of the value of your home that you owe will remain the same, but the actual value can rise or fall, depending on the price of your property. 

For instance, if your £200,000 home had risen in value and was now worth £300,000, the 20% you borrowed would now cost £60,000 to repay (up from £40,000 when you took out the loan). The equity you own would also have risen accordingly. Equally, if prices plummet, your loan repayment would be less, but your equity would be lower too.

You can choose to make additional repayments to repay the equity loan early at any time. Any part payment you choose must be at least 10% of the market value of your home at the time, however. 

If the equity loan is not fully repaid before you sell the property, you’ll need to repay any outstanding amount calculated as a percentage of the final sale price. 

Fees associated with Help to Buy

There are several fees associated with a Help to Buy equity loan that you should be aware of before you commit to the scheme.

Interest payments

You do not have to pay interest for the first five years. In the sixth year, you’ll be charged interest at a rate of 1.75%. The interest rate increases every year in April, by adding the Consumer Prices Index (CPI) rate plus 2%.

Management fees

You’ll need to pay a monthly management fee of £1 from the date you take out the equity loan until it is paid off in full.

Admin fees

Making repayments on the equity loan will often attract admin fees.
The Help to Buy - Wales scheme is great for first-time buyers getting onto the property ladder without needing to save as big of a deposit. For buyers who aren't eligible for this scheme, there are similar shared equity schemes they can look to use instead.

Help to Buy mortgage FAQs

When will Help to Buy end?

This scheme has now ended in England, however, applicants in Wales can apply until December 2022 and the scheme ends in Wales in March 2023.

Is Help to Buy worth it?

It depends on your specific circumstances. A Help to Buy equity loan should allow you to get on the property ladder faster and secure a more favourable mortgage rate however, the interest rate starts to rise after six years and the amount you owe overall rises with the value of your home.

Can I choose any mortgage with Help to Buy?

No, you need to get a mortgage designed to work with the scheme, which may mean a specialist lender or product.

Can I use Help to Buy for a second home?

No, you can only use it to buy your main home. You cannot use it for a buy-to-let investment, holiday home or property you will not live in yourself.

Can I get Help to Buy anywhere in the UK?

It’s currently only available in Wales, and that scheme is due to end in March 2023, with new applicants accepted until December 2022.

Can I get Help to Buy if I am self-employed?

Yes, so long as you can evidence that you have a reliable income.

Can I remortgage if I used Help to Buy?

Yes, some remortgage deals are available for people with Help to Buy equity loans. Alternatively, you could consider remortgaging for a bigger percentage of the property’s value if possible and using it to repay the equity loan in full.

How do I apply for Help to Buy?

To apply for the scheme in Wales visit Help to Buy Wales.

About the author

Atousa Cunnell
Atousa is a Content Producer for money.co.uk, responsible for writing and editing a wide range of mortgage content that are helpful to the reader.

money.co.uk is not a mortgage intermediary and makes introductions to Mojo Mortgages to provide mortgage solutions.

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