Help to Buy schemes – FAQs

Want to know more about the government’s Help to Buy scheme and how it might affect you? We answer some of the most frequently asked questions.

Does Help to Buy make it easier for me to buy a property?

It might, if you have at least a 5% deposit saved, can prove you can afford the mortgage payments and meet the provider’s lending conditions (which vary between lenders).

Where is the Help to Buy scheme available?

The Help to Buy Equity Loan schemes are available in England. If you live elsewhere in the UK, you can use:

Will I find it hard to get another mortgage when I move?

If your home’s value falls or stays the same, it could be harder to pay back the government’s equity share. This could make it harder to get another mortgage when you move.

The Help to Buy scheme only allows you to take out a repayment mortgage, so the amount you borrow gradually reduces over time. This means by the time you come to sell you should own a bigger proportion of your property, even if house prices haven’t gone up.

Discuss your options with your mortgage lender or broker before you start looking for another property.

Would I be better off renting, or buying through Help to Buy?

This depends on your individual circumstances.

The scheme is designed to help people who have already made the decision to buy and who have a deposit of at least 5%, and can afford the mortgage repayments. But make sure you can afford the other costs, such as the legal fees and Stamp Duty.

How long will the help to buy scheme run for?

The Government has confirmed it will extend its Help to Buy equity loan scheme from 2021 to 2023. However, this extension will be restricted to first-time buyers purchasing newly built homes.

From 2021, there will also be new regional price caps which could reduce the maximum value of homes that can be bought through the Equity Loan Scheme.

What happens when I sell my Help to Buy home?

When you sell your Help to Buy home you will repay your equity loan at the same time. So if you initially purchased with a 75% mortgage and a 5% cash deposit and have made no other repayments you will repay 20% of the value of your home at the time you sell.

Remember you can sell your home at any time, but an independent valuer must decide what it is worth.

What happens if property values fall?

When you sell, the full amount of the equity loan you received will have to be paid as a percentage of the sale.

This means if the market value of your property falls below the level at which it was first purchased, you will repay less than the original amount than you borrowed through the equity loan scheme. For example, if you purchased a home valued at £250,000 of which 20% was made up of an equity loan (£50,000) and the value of your home subsequently fell to £200,000. You would only need to pay back 20% of £200,000 which is £40,000.

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