Help to buy Mortgage
Looking to buy your first home? Discover how Help to Buy can make it easier to secure a mortgage with a smaller deposit. Learn how much you can borrow, what schemes are available, and how to apply – all with expert support every step of the way
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What is Help to buy?
A Help to Buy mortgage is a type of mortgage designed to help first-time buyers (and in some cases, existing homeowners) purchase a property with a smaller deposit, often supported by a government scheme. While the original UK Help to Buy: Equity Loan scheme ended in March 2023, the term is still commonly used to refer to similar support options for first-time buyers.
Here’s how a Help to Buy-style mortgage typically worked:
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Smaller deposit required: You could buy a home with just a 5% deposit.
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Equity loan from the government: The government would lend you up to 20% of the property value (40% in London), which was interest-free for the first five years.
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Mortgage for the rest: You’d take out a standard mortgage for the remaining amount (typically 75
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Only new-build homes were eligible under the official Help to Buy scheme.
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The property price limit varied by region.
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The government loan had to be repaid when you sold the home or after 25 years, whichever came first.
Mortgage Guarantee Scheme:
Make homeownership easier with less than a 10% deposit. This scheme offers an increased number of 95% loan-to-value mortgage deals on the market, giving you more flexibility. Act now as it has been recently extended to the end of 2023.
First Homes:
Benefit from a significant discount (typically 30-50% of market value) when buying a newly built home. Priority access is given to key workers and those on low incomes, ensuring you have access to affordable housing.
Shared Ownership:
Experience the middle ground between buying and renting. Purchase a share of a property with a local authority or housing association and gradually increase your ownership over time. This option allows you to scale your investment and build equity.
Right to Buy:
Specifically designed for those looking to purchase the council property they’re currently residing in, this scheme discounts the property’s market value. The discount can also be used as a deposit for your mortgage.
Alternatives to Government schemes
In addition to government schemes, there are alternative ways to secure a mortgage with limited deposit
Guarantor Mortgages:
Get support from a family member (usually a parent) who agrees to take responsibility for the mortgage if you face difficulty making payments. This arrangement typically requires a deposit amount, which can be covered by the family member’s savings or secured against their property.
Joint Borrower, Sole Proprietor Mortgages:
Allow a family member to share responsibility for the mortgage without being named on the deeds or residing in the property. This option provides flexibility and support.
The Lifetime ISA (LISA)
With a LISA, you can contribute up to £4,000 per year, and the government adds a 25% bonus at the end of the tax year, serving as a valuable mortgage deposit.
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