Get moving with Help To Buy

Help to Buy is a government scheme that means you could move home with a deposit as low as 5%. Whether you're taking your first step onto the property ladder or moving up a rung, we've put together everything you need to know about the two options available: Mortgage Guarantee and Equity Loan.

Pre-owned property? Mortgage Guarantee may help

If you're after a pre-owned home, the Mortgage Guarantee scheme could help. It gives you the freedom to purchase any property in the UK up to the value of £600,000, with a mortgage for 95% of the purchase price.

Find out more

Go modern with an Equity Loan

England

Exclusively for new builds in England, get a 20% government loan towards your deposit.

Learn more

Scotland

Things work a bit differently in Scotland but the message is the same: Help to Buy is available.

Learn more

Wales

Looking to buy a new build in Wales? The equity loan scheme is available here too.

Learn more

Why wait? Start your property search today.

What is the Mortgage Guarantee scheme?

These days many mortgages can seem out of reach. The Mortgage Guarantee scheme makes it possible to purchase a pre-owned or new build property under £600,000 with a 5% deposit. It could get your home-moving ambitions back on track.

Here's a quick summary of the important bits:

  • Available for pre-owned properties and new builds across the UK - up to the value of £600,000.
  • Both existing homeowners and first-time buyers are eligible.
  • Buyers need a minimum of a 5% deposit.
  • You must occupy the property and it must be your only property.
  • Available across the UK from participating mortgage lenders.

Find your perfect property, without losing peace of mind

Help to Buy is a government-backed scheme to support buyers who may previously have struggled to raise a sizeable deposit. It's the same as a traditional mortgage, except the government guarantees a portion of the loan to an affiliated lender (though the agreement is between the lender and the government, not you!). You will barely notice the difference.

So what do you need to know?

The Mortgage Guarantee scheme can only be used for property you intend to occupy, and must be your only property. A minimum deposit of 5% of the property value will be required. The rest is par for the course - as long as you tick the lender's boxes in terms of credit score and loan-to-income ratios. Another thing to note is that the scheme only applies to repayment mortgages. Interest-only and self-certified mortgages are not included.

There are lots of places you can go for more advice and assistance: estate agents, mortgage advisors, independent financial advisors and even developers.


Be the first to know about changes to the Help to Buy scheme by registering with Rightmove.

Next step? Blow some misconceptions out of the water on our Common Myths page.

Why wait? Start your property search today.

What is the Equity Loan scheme?

If you are interested in buying a new build property, the Equity Loan scheme could help. Since April 2013 the scheme has made it possible to borrow up to 20% of the cost of a new build from the government. You only need a 5% deposit and a 75% mortgage to make up the rest.

Here's a quick summary of the important bits:

  • Available in England for affiliated new builds with a value up to £600,000.
  • Both first-time buyers and existing homeowners are eligible.
  • Buyers need a minimum deposit of 5%.
  • You must occupy the property and it must be your only property.

How does it work?

With the Equity Loan scheme you can borrow 20% of the purchase price of a new build property valued up to £600,000. You won't have to pay anything on the 20% loan for the first five years. In the sixth year you will be charged 1.75% of the loan's value, which will increase every year by the retail price index plus 1%. Unfortunately the scheme is not available for all new builds. Your first step should be to check whether the developer that is building your property is taking part in the Equity Loan scheme. Most well known developers are.

So what do you need to know?

You will be entitled to sell your home at any time. But, if you do so, you will have to pay back the loan: 20% of the sales price, which may be more than you originally borrowed if your property has increased in value.

For more advice on the Equity Loan scheme you can speak to developers, estate agents, mortgage advisors and independent financial advisors.


Be the first to know about changes to the Help to Buy scheme by registering with Rightmove.

Next step? Blow some misconceptions out of the water on our Common Myths page.

How much could you afford?

Enter your deposit amount and calculate how much a property within the scheme will cost you, including the mortgage amount, government loan and property price.

Step 1: Enter a deposit amount (up to a maximum of £30,000)



  • With a government loan of: £40,000 (20%)
  • And a mortgage of: £150,000 (75%)
  • You can purchase a home up to: £200,000 (100%)

The above calculation is based on the minimum deposit of 5%.

In the 6th year, you'll be charged a fee of 1.75% of the loan's value. After this, the fee will increase each year by Retail Price Index plus 1%. All figures are purely indicative and should not form the basis of any purchasing decisions.

Under the scheme:


  • Government loan
  • Deposit
  • Mortgage

Step 2: Search for Help to Buy properties

What is the Scottish Equity Loan scheme?

With the Equity Loan scheme in Scotland, if you have a 5% deposit you can get a loan for up to 20% of the total value of your dream new build. So a shortage of savings needn't prevent you from getting that all-important mortgage.

Here's a quick summary of the important bits for the Scottish scheme:

  • Available in Scotland for affiliated new builds up to the value of £400,000.
  • Available to both first-time buyers and existing home owners.
  • Buyers need a minimum deposit of 5%.
  • You must occupy the property and it must be your only property.
  • Most new builds are eligible, but you may need to check with the property developer.
  • The mortgage must be a repayment mortgage.
  • You can repay the government's equity stake at any time.

How does it work?

The scheme was launched by the Scottish Government in September 2013. It's designed to help fulfil the property ambitions of buyers who cannot raise large deposits. Buy-to-let investors are excluded - and you cannot part-exchange your current property. But, if you are eligible, you can get a 20% equity loan towards the purchase of a new build property worth anything up to £400,000.

So what do you need to know?

If you are already a homeowner, you will need to sell your current property before you purchase somewhere new using the Scottish Equity Loan. Most new build properties are eligible, but it hinges on the property developer being affiliated with the scheme. The majority are.

The freedom you get with a 20% loan to put towards your mortgage could change everything. But there are conditions. The main one being that you cannot opt for lower mortgage repayments if your income suggests you could maintain something higher. This will likely be based on a multiple of up to 4.5 times your income if you are purchasing alone, or up to 3.5 times for a couple. An assessment will make sure your monthly costs (mortgage, service charges and fees) are no more than 45% of your net disposable income.

For more advice on the Equity Loan scheme you can speak to estate agents, mortgage advisors, independent financial advisors and developers.


Be the first to know about changes to the Help to Buy scheme by registering with Rightmove.

Next step? Blow some misconceptions out of the water on our Common Myths page.

Why wait? Start your property search today.

What is the Welsh Equity Loan scheme?

If you are struggling to raise a deposit to move to a new build home in Wales, then the Help to Buy - Wales Equity Loan scheme could be your answer. You could be moving home with as little as a 5% deposit and a 75% mortgage. Under the Help to Buy - Wales scheme you can make up the rest with a 20% equity loan from the government.

Here's a quick summary of the important bits for the Wales scheme:

  • The Scheme is available in Wales for affiliated new builds up to the value of £300,000.
  • Existing home owners and first time buyers are eligible.
  • Buyers are required to provide a minimum deposit of 5%.
  • This must be your only property and you must occupy the property.
  • The maximum equity loan you can be offered is £60,000 (there is no minimum amount).

How does it work?

You can now borrow 20% of the value of a new build property worth up to £300,000 under the Help to Buy - Wales scheme. From the date you start the scheme, you will have to pay a monthly £1 administration fee. Other than this, you won't have to pay anything else in the first five years. In the sixth year you will be charged interest of 1.75% per annum on your loan which will increase every year by the retail price index plus 1%.

The scheme may not be available for all new builds in Wales, so do check with your house builder to see whether they are taking part in the scheme. Most of the well-known house builders are already taking part in this scheme.

So what do you need to know?

The Equity Loan is repayable after 25 years, or on the sale of the property, whichever comes first.

You can sell your home at any time, however you will have to pay back the loan: 20% of the sales price at the time you sell. If your property increases in value, you may end up repaying more than you originally borrowed.

For more information and advice on the Equity Loan scheme, please speak to your local house builders, estate agents, mortgage advisors or independent financial advisors.


Why wait? Start your property search today.

    Resources

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    Find your local equity loan agent

    Help To buy

    Interested in the equity loan scheme? Contact a Help to Buy agent (who works with Government agencies) for help with eligibility and the application process.




    Interested in the mortgage guarantee scheme? Contact your local Estate Agent or New Homes developer who can tell you more.


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