Help to Buy frequently asked questions

What is help to buy?

  • Help to Buy is a government funded initiative set up to help first time buyers and those looking to move up the property ladder to purchase a property with a minimum personal deposit of 5% of the purchase price. 

Why has help to buy been set up?

  • The government is continuing its pledge to help more people across the country become homeowners. It is also concerned with increasing the supply of housing and low-deposit mortgages.

Equity Loan: 

  • When does the scheme start?
    • The Help to Buy equity loan scheme became available on 1st April 2013.
  • What properties are available on the scheme?
    • This is available on new build properties only, up to the value of £600,000.
  • Can I buy any new build property with the scheme?
    • Some new build developments may not have Help to Buy available.
  • How does the 'equity loan' work?
    • This combines the following:
      • You provide a personal deposit of a minimum of 5% of the property value
      • The government provides and equity loan of up to 20% of the property value and up to 40% of the property value for those buying in London.
      • A bank or building society provides a mortgage for up to 75% of the property value

Have a look at our handy Help to Buy guide for more information.

  • What interest rate do I pay on the Government equity loan? 
    • This is interest free for the first five years.
    • After this period, a fee of 1.75% is payable on the equity loan. This will increase annually by the rate of inflation plus 1%.
  • What rate of inflation will be used?
    • Without getting too complicated, the Retail Prices Index (RPI) will be used, which is one of the recognised measures used by the government to measure inflation.
  • When will I have to pay back the equity loan?
    • The loan must be repaid at any time within the term of the mortgage, or on the sale of the property, whichever is soonest.
  • Who is the scheme available to?
    • Help to Buy is available for both first-time buyers and existing homeowners.
  • Can I use Help to Buy for a buy-to-let property?
    • The scheme is only available on properties that will be occupied by the person or persons who have taken out the mortgage, who do not own any other properties.
  • Am I able to get an interest only mortgage using Help to Buy?
    • The scheme is only available in relation to repayment mortgages.