Help to Buy scheme
Available Help to Buy schemes
Help to Buy: equity loan scheme
In England, you’ll only need a deposit of 5% with a government loan of up to 20% and a mortgage of 75%. The maximum purchase price is £600,000.
For all areas where the scheme is available, the government loan is interest free for the first 5 years, although a £1 per month administration fee is payable during this time, which does not count towards the repayment of the loan. After 5 years, the interest rate starts at 1.75%, which increases every year by the Retail Price Index (RPI) + 1%. This loan has to be repaid after 25 years or when the property is sold, if it happens earlier.
For further information visit https://www.helptobuy.gov.uk/equity-loan/equity-loans/
London Help to Buy: equity loan scheme
In the boroughs of London (click here for a map), the maximum equity loan is 40% to reflect the generally higher property prices. In this case, with a minimum of 5% deposit and a 40% equity loan, the mortgage is only 55% of the property purchase price.
For further information visit https://www.helptobuy.gov.uk/equity-loan/london-help-to-buy/
Scotland Help to Buy scheme
The Help to Buy (Scotland) Affordable New Build scheme is available for new build homes with a maximum purchase price of £200,000 for purchases completing before the end of March 2018 and £175,000 for purchases before the end of March 2019.
Furthermore, no interest is charged on the equity stake, which can be repaid at any time.
You won’t be eligible for the scheme, if
- you can afford to buy a home without the Government having an equity share in the property or
- you’re buying alone and need a mortgage of more than 4.5 times your income or 3.5 times your income if you’re buying as a couple.
For further information visit www.gov.scot/htb
Wales Help to Buy Scheme
Here the scheme is available for new build properties costing up to £300,000.
The Welsh Government will provide a shared equity loan for up to 20% of the property purchase price in addition to your minimum 5% deposit, and the remaining balance will need to be covered by a mortgage.
For further information visit http://helptobuywales.co.uk
Help to Buy: ISA
The Help to Buy Individual Savings Account (ISA) helps people save towards their first home, by giving them a cash boost from the government.
The bonus is claimed by your solicitor on your behalf, who will add it to the money you are putting towards the purchase of your new home. The Help to Buy ISA bonus is in addition to the Help to Buy equity loan provided by the government.
Only first-time buyers are eligible for the Help to Buy ISA, and to qualify you must:
- take a mortgage
- live in the house you are buying
- not rent out the house
- save at least £1,600 in the scheme before claiming the bonus
- be a UK resident
- not own any other property anywhere in the world
- not be paying into a cash ISA in the same tax year
- buy a house costing up to £250,000 in England or £450,000 in London.
The Help to Buy ISA limits are applicable per first time buyer, not per household. This means that if two first time buyers purchase a property together, then they can have an ISA each and combine the savings and the bonuses towards the deposit.
For further information visit www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/
Help to Buy: mortgage guarantee scheme
This scheme finished on 31 Dec 2016, but a wide range of lenders still offers mortgages up to 95% of the purchase price.
For those who took out a mortgage with the mortgage guarantee option, further information is available on www.helptobuy.gov.uk/mortgage-guarantee/