Compare Help to Buy mortgages

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.

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.

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.