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Help To Buy

The Government has created the Help to Buy scheme to help hard-working people like you take steps to buy your own home. Whether you want to get onto the housing ladder or move up it, Help to Buy makes it possible to buy a new-build or existing home priced up to £600,000 with as little as a 5% deposit.

Equity loan

How does it work?

With a Help to Buy: equity loan the Government lends you up to 20% of the cost of your new-build home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.

You won’t be charged loan fees on the 20% loan for the first five years of owning your home.

Example: for a home with a £200,000 price tag

If the home in the example above sold for £210,000, you’d get £168,000 (80%, from your mortgage and the cash deposit) and you’d pay back £42,000 on the loan (20%). You’d need to pay off your mortgage with your share of the money.

Who is eligible?

Equity loans are available to first time buyers as well as homeowners looking to move. The home you want to buy must be newly built with a price tag of up to £600,000.

You won’t be able to sublet this home or enter a part exchange deal on your old home. You must not own any other property at the time you buy your new home with a Help to Buy equity loan.

This scheme is available in England only. The Scottish Government, Welsh Government and Northern Ireland Housing Executive run similar schemes - check out their websites.

How to apply

The Help to Buy: equity loan scheme is run by Government-appointed Help to Buy agents. They can guide you through your purchase, from providing general information about the scheme to dealing with your application.

Or look out for the Help to Buy logo on new-build developments and ask about the scheme there.

Mortgage guarantee information

How does it work?

A mortgage supported by the Help to Buy: mortgage guarantee scheme works in exactly the same way as any other mortgage except that under the scheme the Government offers lenders the option to purchase a guarantee on mortgage loans.

Because of this support, lenders taking part are able to offer home buyers more high-loan-to-value mortgages (80-95%).

You will still be fully responsible for your mortgage repayments. So if you have a 5% deposit, you will need to take out and pay back a 95% mortgage.

Example: for a home with a £200,000 price tag

Who is eligible?

A mortgage under the Help to Buy: mortgage guarantee scheme works like any other mortgage. Your lender will check that you can afford the mortgage and that you do not have a history of payment difficulties.

To qualify for a mortgage supported by Help to Buy: mortgage guarantee:

The Help to Buy: mortgage guarantee scheme will run for three years until 31 December 2016.

How to apply

The Help to Buy: mortgage guarantee scheme is offered by mortgage lenders across the UK. You can apply for a mortgage through participating high street lenders or through a mortgage broker.

Your next step is to find your home and talk to your lender. Look out for the Help to Buy logo.

Look at our answers to questions we have been asked about the scheme for further information.

You can get more help and advice from the Money Advice Service and other useful contacts.