The Help To Buy mortgage scheme

Discover how the Help To Buy government scheme can make it more affordable to buy a new-build property in the UK.

The Help To Buy scheme allows you to accept an equity loan from the government to help you purchase a new-build property in the UK.

What is Help To Buy?

This loan is interest-free for five years, although the interest rate will increase every year after that.

In England, you can borrow up to 20% of the property’s value to put towards your mortgage deposit. With this assistance, you’ll only have to stump up at least 5% of the property’s value yourself (these figures differ in London, Wales, Scotland and Northern Ireland).

Help To Buy not only makes it easier for mortgage applicants to save for a mortgage deposit, it also helps to reduce their monthly mortgage payments. After all, their mortgage will only be worth 75% of the property’s value at the very most.

It has proved to be an incredibly popular scheme, with hundreds of thousands of loans having been granted since it launched in April 2013.

Who qualifies for Help To Buy?

Right now, anyone can apply for a Help To Buy equity loan provided they’re eligible for a mortgage and are deemed to be able to afford the repayments. However, from April 2021, this scheme will be available to first-time buyers only.

There are only specific types of properties that are participating in the Help To Buy scheme. These are new-build properties worth up to £600,000 in England, £300,000 in Wales or £200,000 in Scotland.

To discover participating properties in your area, you’ll need to contact your local Help To Buy agent.

You’ll have to use the property as your main residence in order to qualify for a Help To Buy equity loan.

How much can I borrow?

Right now, you can borrow up to 40% of your property’s value in London, 20% in the rest of England and Wales or 15% in Scotland.

However, from April 2021, the amount you can borrow in England will be regionally capped. You’ll only be able to borrow 1.5 times the Autumn 2018 regional average first-time buyer price forecast.

These price caps are detailed below:

North East£186,100
North West£224,400
Yorkshire & The Humber£228,100
East Midlands£261,900
West Midlands£255,600
East of England£407,400
South East£437,600
South West£349,000

How much interest will I pay on Help To Buy equity loans?

You’ll pay no interest on Help To Buy equity loans for the first five years.

In the sixth year of the loan, you’ll pay interest at a rate of 1.75%.

Each year, this rate will be multiplied by the Retail Price Index (RPI) inflation figure plus 1%.

Example: If in the seventh year of your loan, the RPI figure was 5%, your interest rate would increase by 6%. As 1.75 x 1.06 = 1.855, your interest rate for the upcoming year would be 1.855%.

Since the rate will continue to increase faster than inflation every following year, it is in your best interests to pay it off as soon as possible.

Shared Ownership

Shared Ownership is another government scheme that makes it more affordable to buy a home. Technically, it falls under the Help To Buy umbrella, although it works completely differently to the equity loan scheme.

With this scheme, you can buy between 25% and 75% of a home and pay subsidised rent to a housing association on the remainder. When you can afford to buy a further portion of the home, you are free to do so.

This scheme is available to first-time buyers and existing shared ownership participants only. You can learn more about how it works in our full guide.

Help To Buy mortgages vs traditional 95% mortgages

There is a wide range of mortgage lenders offering traditional 95% mortgages. That means it’s possible to buy properties with a 5% deposit, without using Help To Buy.

So, which option is better?

The key differences between these two options are highlighted below:

Help To Buy mortgage

  • You’ll be making mortgage repayments on a smaller percentage of the property. This means your monthly repayments will be lower and you may even be offered a better interest rate.
  • However, after five years, you’ll begin paying interest on your equity loan and the rate will increase significantly every year.
  • Until the loan is repaid, the government will own a stake in your home, meaning you benefit less from the value of your property rising.
  • Help To Buy is only available on participating new-build properties.

Traditional 95% mortgage

  • You’ll be making mortgage repayments on a loan worth 95% of the property value. You’ll pay more each month than with a Help To Buy mortgage.
  • However, you don’t have to worry about repaying an equity loan with an ever-increasing interest rate to the government.
  • You’ll own 100% of your home, meaning you fully benefit from your property value rising.
  • You’re free to purchase any type of property worth any value, as long as you’re deemed to be able to afford it.

Frequently asked questions about Help To Buy

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.

More guides on Finder

  • Emma mattress review

    Find out more about the budget-friendly Emma mattress with its 200-day free trial, including comfort, composition, shipping, returns, FAQs and more.

  • Klarna vs Laybuy: Compare popular buy now pay later platforms

    How do Klarna and Laybuy compare? We put two of the UK’s most popular buy now, pay later services head to head to see how they match up and which might be the right choice for you.

  • Best car seats of 2021

    We used ADAC safety testing data to compare the 10 best child car seats to buy in the UK for 2021. Compare price, weight and safety features.

  • What is a good credit score?

    Find out the difference between a credit score and a credit report, plus the factors that can push your score up and down.

  • Agricultural mortgage

    What you need to know about getting a mortgage if you’re buying or refinancing a farm or farmland, including the factors lenders consider when you apply for one.

  • Mortgage for a pub

    Everything you need to know about taking out a mortgage to buy or refinance a pub. Find out where to get one, how to get the best deal and the factors lenders consider.

  • Mortgage for a hotel

    In-depth guide to taking out a commercial mortgage to buy or refinance a hotel. Find out how to get the best rates, factors lenders consider and what you need to apply.

  • Bridging loan vs commercial mortgage

    Find out if a bridging loan or commercial mortgage would suit you if you’re buying or refinancing commercial property and when a bridging loan can be a better option.

  • How much deposit do I need for a commercial mortgage?

    Find out how much deposit you need if you’re taking out a commercial mortgage, including the factors lenders take into account, and how to get the best deal for you.

  • How to invest in cryptocurrency

    Learn how to get started investing in cryptocurrency, the methods available to you, and what to keep in mind before making your first purchase.

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site