Help To Buy Schemes Explained

If you are a first-time homebuyer, the chances are you’ve come across the government’s help to buy scheme when conducting your research.

Introduced in 2013, the programme has been designed to help first-time buyers or anyone struggling to save to move into another property with their purchase. Traditionally, lenders require you to have a 20 per cent deposit; under the scheme, buyers can purchase a new property with just a 5 per cent deposit, as the government will provide a guarantee for the remainder. This is a substantial saving that places property ownership within reach for a number of buyers who would otherwise struggle to raise the capital for a deposit.

Is help to buy right for you?

Help to buy could be ideal for you if you are looking to buy a property but are struggling to come up with a full deposit, or are looking to buy in an expensive area.

The government’s portion of the loan is interest free for the first five years, which helps to keep your costs down, and you can expect to be charged interest of just 1.75 per cent on that portion when it becomes payable in year six. You can repay the equity loan at any time without incurring a fee, which is also advantageous, otherwise the government will reclaim it when it’s time to sell. However, it’s important to note that they will retake their percentage at your home’s current value, not the value of your property as it stands. This could mean that you lose money if your home is worth more than when you purchased it, and so it is a key factor to bear in mind.

Help to buy is only available on a new-build property, and you must be obtaining the mortgage for a property that will be your primary residence. That is to say, you cannot avail of help to buy to purchase a property you plan to let out. Finally, the home in question must have a maximum value of £600,000.

Get more information

Help to buy is offered through most national lenders, and it is easy to find out if you could be a suitable candidate for this mortgage product with our help.

If you are unsure about how the scheme works or whether or not you are eligible, simply get in touch with us at My Mortgage Force. We can explain in further detail this scheme and if it is right for you, and show you the next steps when it comes to connecting with a local help to buy agent.