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A Guide on Help-to-Buy

Help to buy schemes can be a great way of funding a move for your new home. Read on to find out more!

For first time buyers about to buy your new home with no real worries over your finances. Might be pretty tough to imagine at the moment, right? But don’t panic. Throughout this mortgage guide, we’re going to show how help to buy can be a great way of saving you money and most importantly, funding your move into your new home! Let’s get started.

What is a help to buy scheme? 

The help to buy scheme is basically a government initiative which is used to help first-time buyers get the property that they desire by only amassing a 5% deposit. If this sounds like it might be an attractive proposition to you then carry on reading! This mortgage guide is going to explain to you how help to buy schemes work and how you can qualify for one. 

How does help to buy work?

Help to buy schemes can be a great option if you think you can manage a mortgage or you’re struggling to come up with a decent deposit amount. So, how do they work?

Ok, imagine you are going to buy a home which is worth £150,000. With help to buy schemes you will only need to provide a 5% deposit, then the government will lend you an additional 20% of your property’s valuation and then you get a mortgage for the remaining 75%. This will then add up to the total value of your home.

When it comes to repaying the money you receive from the government, you will not pay any interest on the money for the first five years of the loan. Not bad is it? You will then have to pay a 1.75% interest rate in your sixth year and increase 1% every year after this. While this might sound scary, we think that this is a pretty nominal fee considering that the government give you the first five years interest-free. This will be very helpful for you to get on your feet financially in the first few years of your mortgage!

How do I know if I’m eligible?

Most mortgage guides will tell you that help to buy schemes are only really available for first-time buyers and existing homeowners if they want to buy a new home! So, if that’s who they’re intended for, then who can’t apply for a help to buy scheme?

In short, you won’t be able to apply for a help to buy scheme to buy a second home or if you wanted to use the property to rent out. This means that you’ll only be able to get a standard repayment mortgage when you buy the property as opposed to getting a buy to let mortgage.

How can we help?

If you’ve got any more questions about help to buy schemes that you don’t feel that this mortgage guide answered then contact us! We can be a great help to you before you commit to a help to buy scheme. So don’t take the risk and get in touch!

Looking for more information on different types of mortgages? Our articles section has so much info on fixed-rate mortgages and other mortgage types.  All of our services is free. Yes, from our mortgage search to our resources, you’ll never pay a penny off of your credit card.


Laura Waller

Laura Waller has been working in the mortgages industry since 2013, joining an independent brokerage in Essex. Laura has CeMAP 2 & 3 – Certificates in Mortgages Advice and Practice. Since then Laura oversees marketing for Mortgages Online, using her experience and expertise to write articles and blogs about mortgages and related topics.

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