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Correct at 08/03/2022

Apply for a Help to Buy mortgage with L&C

Looking for a Help to Buy mortgage? Our online Mortgage Finder will search through 100s of deals to find the best one for you, and we’ll make sure you qualify for any deal before you apply.

We know you might have lots of questions – after all, buying a home and taking out a mortgage is a big decision. Our experts can talk you through anything you’re not sure about and a dedicated case manager will take care of the paperwork, supporting you through the application process. Our advice won’t cost you a penny either, so get in touch now and see how we can help.

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Help to Buy Mortgage Explained

If you’re struggling to save up a deposit to buy a property, the Help to Buy scheme can help.

This is a mortgage scheme for first time buyers, managed by the government, and designed to give buyers a leg up onto the property ladder. You only need to put down a 5% deposit and the government will lend you up to a further 20% of the property price interest-free for the first five years (or up to 40% if you’re buying a London property). If you take the maximum equity loan, it means you only need a Help to Buy mortgage for 75% of the property price, or 55% if you’re buying in London, helping you to keep your mortgage costs to a minimum.

The most recent version of the scheme started from 1st of April 2021. Previously, second time buyers who were struggling to move up the property ladder could use the scheme, but now it’s exclusively available to first time buyers.

Help to Buy could be a great way to get on the property ladder if you’re faced with the barrier of saving up a large deposit for your first home. The loan is interest-free for the first five years, giving you much-needed breathing space affordability wise, as it can help to keep the cost of your monthly payments down.

Of course, there are some limitations to the scheme as well - one being that it can only be used to purchase a new build home, so if you have your heart set on a period property, it won’t be suitable for you.

Help to Buy Mortgage Process

Do you think the scheme is a good option for you? The Help to Buy process is fairly simple but we understand you may want some support. L&C, as a specialist Help to Buy mortgage broker, can help you through the process.

You must first find a house under the scheme - there are many participating house builders, so it should be easy to find one you love in the right area for you.

Several lenders offer Help to Buy mortgages, and as with other mortgages, the interest rate will depend on the type of deal you choose. Once you’ve reserved the property you want to buy, you can apply for your equity loan through your Help to Buy Agent. You can then add this to your deposit and apply for a mortgage for the remaining amount you need.

Help to Buy Scheme Eligibility Criteria

If you’re considering buying your first home with a little help from the Government, you should be aware that there are some Help to Buy eligibility criteria. The main things to be aware of are that:

  • You must be a first time buyer
  • You must buy a new build home
  • If you’re married, in a civil partnership or cohabiting with a partner, you need to make a joint application
  • You and your partner must never have owned a home or residential land now or in the past, either in the UK or abroad

There are no maximum income caps for getting a Help to Buy mortgage, but as with any other type of mortgage, you must be able to meet affordability criteria and prove that you can pay the mortgage and associated fees.

Additionally, the home you’re buying must fall under specific regional house caps as stated in the Government’s Help to Buy criteria. The maximum value of the home you’re buying is determined by region as follows:

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

Finding the best Help to Buy Mortgage Deal

As with standard mortgages, Help to Buy interest rates vary between lenders, and we can help you to navigate this. There are a few things you can do to ensure you get the very best Help to Buy mortgage rates on the market:

  • Get your paperwork organised early to speed up the process
  • Ensure you’re registered to vote on the electoral roll
  • Check your credit score and fix any solvable errors on your file
  • Ensure you are consistent with the spelling of names and addresses on all your accounts

For more Help to Buy advice, get in touch with us here at L&C. Our expert advisors are happy to help you navigate the process and secure the best deal to suit your circumstances.

Help to Buy Mortgage Repayment Plan

Repaying this type of mortgage works in the same way as a standard mortgage. You’ll make monthly repayments for a set term until your mortgage is paid off or you sell your home, whichever happens first.

For the equity loan, you only need to pay an admin fee of £1 per month for the first five years. After that, there are interest fees payable, equivalent to 1.75% of the loan - although the amount will increase every year based on the rate of inflation, plus another 2%.

You only need to repay the equity loan at the end of your mortgage term, or when you sell your property. The amount repayable will be calculated on the property value at the time, e.g.: if you took out an equity loan of 20% originally, you will need to repay 20% of the current property value. If you want to pay back all or some of the loan early, you’re welcome to, but note that there is a minimum repayment of 10% of the property’s value.

Apply for a Help to Buy Mortgage with L&C

L&C can support you with the Help to Buy process. Our online Mortgage Finder will search through hundreds of deals to find the best one for you, and we’ll ensure that you qualify for any deal before you apply.

We know that you might have lots of questions - after all, buying a home and taking out a mortgage is a big decision. Speak to one of our experts and we can help you understand whether you’ll qualify for the Help to Buy scheme - and remember, all of our Help to Buy advice is completely free. Get in touch now and see how we can help.

Help to Buy mortgage FAQs

How does a Help to Buy mortgage work?

Under the Help to Buy scheme, you put down a 5% deposit. The Government will lend you up to an additional 20% of the property price interest-free for the first five years. You’ll need a mortgage for the remaining value of the property and you’ll pay it back in the same way as a standard mortgage, with your monthly payments going towards repaying the capital you’ve borrowed and the interest you owe.

How do I apply for a Help to Buy mortgage?

Several lenders offer Help to Buy mortgages, and as with other mortgages, the interest rate will depend on the type of deal you choose. Once you’ve reserved the property you want to buy, you can apply for your equity loan through your Help to Buy Agent. You can then add this to your deposit and apply for a mortgage for the remaining amount you need.

Are Help to Buy mortgages more expensive?

As you’re borrowing less than you’d normally need to with a Help to Buy mortgage (if you had to rely on your own deposit alone), you’ll have access to cheaper mortgage rates than if you were taking out a 95% mortgage. However, you’ll need to factor in the costs of the Government loan, which is only interest-free for the first five years.

Can I get a Help to Buy mortgage with poor credit?

If you’ve had problems managing debt in the past, some lenders may not be willing to accept your application. If your score isn’t perfect but you can show you’re in control of your debts, it may be possible to get a Help to Buy mortgage. It’s worth looking at how you could improve your credit score before you apply. Find out more in our guide: ‘What credit score is needed to buy a house?’

When does the Help to Buy scheme end?

The current versions of the Help to Buy schemes in England and Wales were launched in April 2021 and are due to run until March 2023. The remaining Help to Buy scheme in Scotland finished at the end of March 2022.

Can you be refused Help to Buy?

Not everyone is eligible for Help to Buy, so if your application is refused, it could be because you don’t meet the eligibility criteria as outlined above. However, not all mortgage lenders have the same rules. If you think you meet the criteria to buy a Help to Buy property, then get in contact with L&C and we’ll help you to find the best mortgage lenders for your situation.

How much can you borrow with Help to Buy?

With Help to Buy, you can take out a government loan of up to 20% of the purchase price of the property (up to 40% in London), with a minimum 5% deposit from you and the rest of the money coming from your mortgage. As with any other type of mortgage, the lender will assess how much you can borrow based on your income and outgoings and other factors like your credit history. Our expert advisers can help you understand how much you could borrow.

How much do you have to earn to qualify for help to buy?

There are no minimum or maximum income requirements for the Help to Buy scheme - but you must be able to fund at least 80% of the purchase price through your deposit and mortgage (60% in London).

How much deposit do I need for a Help to Buy mortgage?

The minimum deposit for Help to Buy is just 5%, although if you have a larger deposit, you can use it to reduce the amount of money you need to borrow through your mortgage and government loan. However, if you have a significantly higher deposit, you may get better interest rates with a different type of mortgage. If you’re unsure what’s right for you, get in touch with L&C and we’ll help you to navigate the options.

You might also be interested in:

What is a mortgage? A first time buyer’s guide
How to get on the property ladder
Government schemes for first time buyers