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Help to Buy

helptobuy-logoWho can benefit from Help to Buy?

Help to Buy is available to both first time buyers and existing home owners and means you can buy a new home with a low 5% deposit.

As a first time buyer we it can be difficult to raise a large deposit to purchase your first home. With Help to Buy you’ll need to save just 5% deposit to get a mortgage, so you could purchase your first home sooner than you thought.

If you’re an existing homeowner, you can use Help to Buy to trade up to a bigger property – even if you have limited equity in your current home, because you only need 5% deposit to move.

How does Help to Buy work?

There are two ways to buy a new home using the Help to Buy scheme.

  • The Help to Buy interest free equity loan, which is only available on new build properties, could reduce your mortgage repayments making this an affordable option.
  • The Help to Buy mortgage guarantee, which means that you could get a 95% mortgage on the home of your choice.

help-to-buy-fig1

About the Help to Buy equity loan?

Help to Buy Equity loanWith the Help to Buy equity loan scheme you’ll need a 5% deposit to buy a new home. The Government will provide an equity loan of up to 20% of the value of your property and you’ll need to obtain a 75% mortgage.

Take a look at the example, based on purchasing a property at £200,000.

With a 75% mortgage, your mortgage repayments could be more affordable if you buy a home using the Help to Buy scheme.

The equity loan is interest free for the first five years.

The Help to Buy equity loan can be repaid at any time or on the sale of your home.

For more information (including how to apply, advice on fees and paying back your loan), visit the Help to Buy website.


About the Help to Buy mortgage guarantee?help-to-buy-fig2

Help to Buy mortgage guaranteeWith the Help to Buy mortgage guarantee scheme you could get a 95% mortgage, which means you only need to put down a 5% deposit to buy a new home.

Take a look at the example, based on purchasing a property at £200,000.

With the Help to Buy mortgage guarantee, the Government will guarantee your mortgage up to 15% of the value of the property.

You will still be fully responsible for your mortgage repayments. So if you have a 5% deposit, you will need to take out and pay back a 95% mortgage.

The mortgage guarantee lessens the risk to lenders taking part and means that they may be able to offer cheaper rates than previously available with a 5% deposit.

For more information, visit the Help to Buy website.