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Help to Buy Scheme Guide

In the current property market, it can be challenging to get on the property ladder. For this reason, the government set up The Help to Buy Scheme. This initiative is intended to help first-time buyers as well as those who already own a property.

There are several Help to Buy Schemes available to help those who would otherwise be unable to buy a residential property. This guide will outline the primary schemes, what they offer, and who is eligible.

At WIS Mortgages we are happy to answer any questions you have about Help to Buy. In addition, we can apply for a Help to Buy Scheme on your behalf at no cost to you and manage the process end to end digitally. Just call us on 0203 0111 898 for more information.

Who can benefit from Help to Buy Schemes?

A Help to Buy Scheme may help if you are:

  • A first-time buyer struggling to get on the property ladder
  • A previous homeowner who is struggling to re-enter the property market
  • A homeowner looking to relocate or upgrade to a larger property
  • A home buyer looking to buy a home in London but unable to afford it
  • A shared owner who wants to move to a new house
  • A member of the armed forces

What do Help to Buy Schemes offer?

Help to buy schemes offer a range of benefits. Different schemes have different advantages, and these can include: 

  • A lower initial deposit
  • The ability to buy a higher value property than you would otherwise be able to afford
  • Equity loans with an interest-free period of 5 years
  • Government bonus payments
  • The opportunity to buy a share in a house and pay rent on the rest

What are the main Help to Buy Schemes?

  • Help to Buy: Equity Loan
  • Help to Buy: London 
  • Help to Buy: ISA 
  • Help to Buy: Shared Ownership

Help to Buy: Equity Loan

A Help to Buy Equity Loan Scheme is an initiative set up by the government where they lend you up to 20% of the property purchase price on a New Build property. You make up the remaining amount with a deposit and a mortgage. 

Who is the Scheme For?

The Scheme is open to first-time buyers and homeowners looking to buy a New Build property.

How does the scheme work?

  • The Help to Buy Equity Loan Scheme allows you to borrow money on a residential property up to the value of £600,000 in England and £300,000 in Wales
  • You can borrow a maximum of 120,000
  • You must have a 5% deposit
  • You must take out a mortgage for at least 25% of the value of the property

You won’t be charged loan fees on the 20% loan for the first five years of owning your home. Your Help to Buy Scheme ends once you have paid off the whole loan and interest.

How to apply

You can apply for an equity loan from one of three Help to Buy agents appointed to provide the Scheme in England. 

Visit – https://www.helptobuy.gov.uk/equity-loan/find-helptobuy-agent/

to find your local agent.

Help to Buy: London

Help to Buy: London has the same conditions as the Help to Buy Equity Loan Scheme except that if you live in a London borough, you can borrow 40% of the purchase price of a New Build property from the government. This is to reflect the higher property prices in London. 

How does the scheme work?

You can borrow a maximum of 240,000

You can purchase a property of up to 600,000

You must put down a 5% deposit 

You must take out a mortgage for at least 25% of the property’s value

You won’t be charged loan fees on the 20% loan for the first five years of owning your home. Your Help to Buy Scheme ends once you have paid off the whole loan and interest.

How to apply

Visit – https://www.helptobuy.gov.uk/equity-loan/find-helptobuy-agent/

to find your local agent.

Help to Buy: ISA

The Help to Buy ISA Scheme helps first-time buyers save towards the deposit on a first home.  

This Scheme is no longer available to new applicants. However, if you already have a Help to Buy ISA, you can continue to put up to £200 into your ISA each month.

The government will then top up your savings by 25% up to a maximum of a £3,000 bonus.

The government bonus is paid when you buy a property. You can use the money for a deposit on any residential property up to the value of £250,000. This rises to £450,000 in London.

If you decide to spend the money on something other than a deposit on a property, you will not receive the bonus.

Help to Buy: Shared Ownership

Help to Buy: Shared Ownership allows you to buy a share of a home if you can’t afford the mortgage on 100% of the property. You can buy between 25% and 75% of the home’s value and pay rent on the remaining share. You may be able to purchase further shares when you can afford to do so. The Scheme is open to first time buyers, previous homeowners and existing shared owners.

Who is eligible?

You may be eligible to buy a home through Help to Buy: Shared Ownership in England if:

  • Your household earns £80,000 a year or less outside London, 
  • Your household earns £90,000 a year or less in London
  • You are a first-time buyer
  • You previously owned a residential property but can’t afford to buy one now
  • You are an existing shared owner looking to move

With Help to Buy: Shared Ownership, you can purchase newly built, or existing, leasehold properties available through shared ownership.

There are also specialised Help to Buy: Shared Ownership Schemes for military personnel, people with disabilities and older people.

You can find out more about these schemes here

How to apply

To buy a home through a Help to Buy: Shared Ownership scheme contact the Help to Buy agent in the area you want to live.

Is Help to Buy a good option?

The Help to Buy schemes have enabled thousands of people to get on the property ladder. However, it is worth doing your research to ensure that Help to Buy is the right choice for you.

If you have any questions about Help to Buy Schemes, call us on 0203 0111 898 and our mortgage advisers will be happy to explain your options and help you find the scheme that best suits you. The help to buy as well as mortgage applications can be tracked end to end digitally. 

You can also find more information about the various schemes at the government website