Help to Buy was a government scheme designed to help first-time buyers get up onto the property ladder. It is no longer available in England, though the scheme was extended to March 2025 in Wales. If you are hoping to buy a property in Wales before March 2025 under this scheme, then this guide will cover everything you need to know about Help to Buy, the Help to Buy mortgage, and buying your first property.
What is Help to Buy?
In Wales, you can get an equity mortgage for new-build homes. The property must have been developed by a participating builder; it does not apply to just any new build.
With Help to Buy, you need just a 5% deposit to get started. The maximum property price you can buy is £300,000.
You put forward a 5% deposit, and then you take out an Equity Mortgage of up to 20% with a qualifying lender. This is designed to act as your down deposit.
You will then need a standard residential mortgage to cover the rest of the property price.
The Equity Mortgage needs to be paid off within 25 years, though it can be repaid at any time. If you do make a repayment, the remaining amount must be worth 5% of the market value of your property. If it’s less, you need to repay it through monthly repayments or pay it all off at once.
What is a Help to Buy Mortgage?
A Help to Buy mortgage means one of two things:
The Equity Mortgage
The Equity Mortgage is the 20% mortgage you can get through the Help to Buy scheme. It is organised by the government.
The First Charge Mortgage
A first charge mortgage is simply the mortgage that gets repaid first. It is the standard mortgage you’d get to pay off the rest of the property price.
You only get one choice with the Help to Buy Scheme’s Equity Mortgage. However, you can shop around for different lending options, interest rates, and terms and conditions with your first charge mortgage.
How to Find a Mortgage to go Along With the Help to Buy Scheme
If you are getting deposit help from the Help to Buy scheme, it may be difficult to know where to start with getting your standard mortgage. You will need different documents, and you’ll also need access to lenders who are familiar with Help to Buy and who are aware that it’s been extended to March 2025 in Wales.
Frequently Asked Questions
Can I get Help to Buy in England?
The Help to Buy scheme has ended in England. There are, however, other schemes in place. You can get a shared ownership mortgage, first-time buyer discounts, and even a Help to Build equity loan if you intend to build your home.
Can I get Help to Buy in Scotland?
No, as in England, there is no Help to Buy. Instead, you can get a property for less through shared ownership or with the Help to Build scheme.
You can also buy a property at a fraction of the cost through the Open Market Shared Equity scheme, which means you pay for 60 to 90% of a property, and the Scottish government holds the rest. Similarly, there is also the New Supply Shared Equity scheme, where you pay 60 to 80% of the price of a new build, and the Scottish government pays for and holds the rest.