What you need to do to buy your first home | Savings | Deposit | Help to buy | Get a Mortgage

This is Jenny. She’s a first-time buyer. With so much advice available, she feels confused about her options. To make it easier, we’ve broken it down into three categories:

• Deposit
• Help to Buy Scheme 2021
• Getting a Mortgage Without Help to Buy

1. Deposit

Saving for a Deposit

Saving for a deposit can take a long time, but there may be quicker ways for first-time buyers like Jenny.

One option is the Lifetime ISA (LISA):

• Government contributes 25% towards your savings.
• Worth up to £1,000 per year if you save the maximum of £4,000 annually.
• Available to people aged 18–39.
• Applies if you are buying a home worth £450,000 or less.
• For every £2 saved, the government adds £1.
• Couples can each open a LISA, doubling the benefit.

Over time, this can make a big difference to your deposit. (Check the government website for more details.)

2. Help to Buy Scheme 2021

How It Works

With the Help to Buy Equity Loan Scheme:

• The government offers a loan of up to 20% of the cost of your new-build property.
• You only need to provide a 5% deposit.
• The remaining 75% is covered by a mortgage.
• In London, the loan can be up to 40% instead of 20%.

Key Details

• Applies only to new homes purchased from a registered Help to Buy developer.
• Maximum property value: £600,000.
• Regional price caps apply (e.g., £186,100 in the North East, up to £600,000 in London).
• Only first-time buyers can use the scheme from 16th December 2020 onwards.
• Scheme planned to end completely by 2023.

Designed to help buyers struggling to save for a deposit.

3. Getting a Mortgage Without the Help to Buy Scheme

Pre-Pandemic Options

Before COVID-19, many lenders offered mortgages up to 95% loan-to-value (LTV).

This gave buyers plenty of choice without using Help to Buy.

Current Situation

After the pandemic, many lenders removed 95% LTV products.

At present, buyers generally need a minimum 10% deposit.

Lenders are cautious and criteria change frequently.

Future Outlook

Prime Minister Boris Johnson recently mentioned a 5% mortgage scheme.

No formal details have been announced yet.

Buyers should stay updated and speak to a qualified mortgage broker for the latest information.

Summary

• Save as much as possible – more savings improve your mortgage options.
• Currently, there are no 5% deposit mortgage products available.
• You’ll likely need at least a 10% deposit, unless you use the Help to Buy scheme.
• Help to Buy remains available for first-time buyers, but only on new-build homes within the price caps.
• Without Help to Buy, there are fewer mortgage options right now, so saving extra may help you get on the property ladder.

Final Note

For free advice, you can always contact us at WIS.

Reminder: A mortgage is secured against your home or property. It may be repossessed if you do not keep up with repayments.