How does the Help to Buy scheme work?

Whether you want to get onto the housing ladder or move up it, the Government backed Help to Buy scheme makes it possible with as little as a 5% deposit.

The scheme is made up of two elements, the first being an equity loan where the Government will lend purchasers up to 20% of the property value on a new build home from a participating developer.

How does it work?

  • Help to Buy equity scheme is available on new home developments only
  • Maximum purchase price is £600,000
  • The property must be your main residence. Help to Buy is not available for buy to let investors
  • You own 100% of your home but you only have to cover 80% with your mortgage and deposit
  • The remainder is covered by an equity loan funded by the Homes and Communities Agency and is held as a second charge on your property
  • This loan must be repaid after 25 years, when the mortgage comes to an end or when you move, whichever happens first
  • There is nothing to pay on the equity loan for five years
  • You will repay the equity loan when you sell your home based on the same percentage split at the time of sale
  • Properties are available on Help to Buy throughout England only.

Am I eligible?

  • You will require funds for a minimum 5% deposit on the property.You will require funds for a minimum 5% deposit on the property
  • You will need funds available to meet other costs associated with purchasing a property, for instance solicitors fees, stamp duty and removal costs
  • Your mortgage on the Help to Buy property must be affordable and sustainable
  • The Help to Buy property must be your only property at the time of completion
  • You cannot rent out your existing property to buy a second property
  • Part exchange is not available with Help to Buy
  • You cannot sublet your Help to Buy property
  • Applicants that make fraudulent claims for Help to Buy assistance will be liable to criminal prosecution and will always be required to repay the Help to Buy equity loan immediately.

For further information on the scheme, visit helptobuy.org.uk, ownyourhome.gov.uk or contact us to discuss your mortgage options.

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Premier Mortgage Services is an impartial mortgage broker in Nottingham with over 20 years' experience in arranging mortgages & insurance.