Help to buy
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
What is Help to Buy?
Help to Buy was a UK government-backed scheme that enabled individuals to purchase a new-build home with a 5% cash deposit, supported by an equity loan from the government and a traditional mortgage.
How Much Can I Borrow
Your Estimated Borrowing Amount
Who Is Eligible for the Help to Buy Scheme?
The Help to Buy Equity Loan scheme had specific eligibility criteria designed to support particular segments of the housing market. Understanding these requirements is crucial for anyone interested in the historical context or similar future schemes.
Initially, the scheme was open to both first-time buyers and existing homeowners. However, later iterations of the scheme, particularly the 2021-2023 version in England, were exclusively for first-time buyers. This shift reflected a policy focus on helping those new to the property ladder overcome initial barriers.
Key Eligibility Factors:
First-Time Buyers: The primary beneficiaries in later phases, defined as individuals who have never owned a home in the UK or abroad.
New-Build Properties: The scheme was only applicable to new-build homes from participating builders. These properties had specific regional price caps.
Primary Residence: The purchased property had to be your only home and your main residence; it could not be used for buy-to-let purposes.
No Other Property Ownership: You could not own any other property when you completed the purchase using Help to Buy.
For individuals with complex financial situations, such as day-rate contractors or limited company directors, meeting mortgage lender criteria can be challenging even with schemes like Help to Buy. MortgageTek specialises in these niche markets, offering expert guidance to navigate the specific documentation and income assessments required.
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.
Government Schemes to Consider
While the UK Government is yet to announce a direct replacement for the Help to Buy: Equity Loan, other government schemes could meet your needs:
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.
Why Choose Mortgage-Tek Mortgage Services
Get your right and on-point advice by our OMA-approved brokers. Working with Mortgage-Tek is simple and straightforward, here are the benefits we offer to our worthy clients.Â
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