What is Help to Buy?
It's been around since 2013 and is expected to stay with us until 2020. Backed by the Government, Help to Buy is aimed at helping home buyers to get onto the property ladder swiftly by reducing the burden of having to save up for a large deposit.
There are a range of Help to Buy options that, depending on your circumstances and where you live, could see you owning your own home with as a little as 5% deposit. A much smaller amount than is needed with many lenders.
Here at Lovell - we want to help you make the most of your money and make home buying a fun and easy process. So with that in mind, we've rounded up the Help to Buy deals available to help you understand which might be the best choice for you.
Help to Buy Options -
A common misconception is that Help to Buy is only available to first time buyers, whilst this group does benefit greatly from the scheme, there are offers that will help second time buyers to move up the property ladder too.
Help to Buy: Equity Loan
The Help to Buy: Equity Loan is available to first and second time buyers but is restricted to new build homes only. You will only need to find a 5% deposit and the Government will provide a further 20% Equity Loan. This means with 25% equity you’ll only need a 75% mortgage and will have access to better rates too. The first 5 years of the loan repayment is interest free and the rates thereafter are low in comparison. Learn more about the Help to Buy: Equity Loan.
Help to Buy: ISA
The Help to Buy: ISA was launched last year to help homeowners save their deposit faster. The Government will contribute, for free, an additional 25% on top of your own savings up to £3,000. Your Help to Buy: ISA savings will of course not be subject to tax. Under the scheme you are allowed to save a maximum of £200, when you first open your account you can save an extra £1000 meaning you could get a bonus of £300 in your first month! To open a Help to Buy: ISA you simply do so as you would a normal ISA at a bank or building society. See eligibility and restrictions.
London Help to Buy
Available for new build properties up to the value of £600,000, the Government will make it easier for Londoners to own their own home by lending up to 40% of the property value compared to the standard 20%. With your 5% deposit this means you’ll only need a 55% mortgage. The loan will be interest free for the first five years. For full terms and conditions and further details take a look at our London Help to Buy Page.
Help to Buy (Scotland) Scheme
Launched earlier this month and available for three years, the Scottish Government’s Help to Buy (Scotland) Affordable New Build Scheme allows first time buyers and existing homeowners to secure an Equity Loan of 15% towards a new build home. A minimum deposit of 5% is required. The maximum value of the property allowed decreases slightly for each of the remaining three years of the scheme’s availability, it is currently £230,000. Read more about the Help to Buy (Scotland) Scheme.
Help to Buy – Wales
Available on new build properties up to £300,000 a Help to Buy shared equity loan supported by the Welsh Government means you can climb onto the property ladder with just 5% deposit. You can borrow up to 20% (not more than £60,000) meaning you will only need a 75% mortgage. The loan is interest free for the first five years and is open to first time buyers and existing homeowners. In its first year Help to Buy – Wales saw 7.82% of new homes being purchased via the scheme. Find out more.
Forces Help to Buy
If you’re actively serving and looking to spread your wings into your dream home then the Forces Help to Buy option will allow you to borrow up to 50% of your salary (up to £25,000) and pay zero interest! Available for three years and open to servicemen and women of the Royal Navy, Royal Marines, Royal Air Force and Army. Application is via the Joint Personnel Administration system. Click to find out further information about Forces Help to Buy.
Want to find out how Help to Buy has helped one of our customers?
Find out if Help to Buy could help you own your own brand new Lovell Home...