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 may if you have at least a 5% deposit saved, can prove that 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, Scotland and Wales but the maximum price of the property you can buy differs. In England the most you can pay for your home is £600,000, in Wales the limit is £300,000. In Scotland the maximum threshold depends on the value of the property and when your application is completed. For example, applications completed on or before 31 March 2017, the maximum purchase price cannot exceed £230,000

The other type of Help to Buy scheme is the mortgage guarantee, which is available across the UK and will be closed to new applications from the 31st December 2016.

For more information on Scotland Help to Buy visit this page

Should I use the equity loan or mortgage guarantee scheme?

The Mortgage Guarantee Scheme closed to new loans as of 31 December 2016.

If you want to buy an old property you can only use the mortgage guarantee scheme. For new build flats and houses you can use either the equity loan scheme or the mortgage guarantee scheme. Speak to a mortgage adviser to help decide which scheme is the best one for you.

I need to sell my home to buy a bigger one – do I qualify for both schemes?

Yes, both schemes are suitable for existing homeowners and first-time buyers, as long as the property price is not more that £600,000 (£250,000 for the equity loan scheme in Scotland, £300,000 in Wales).

Will I have difficulty selling my home if it was bought through the mortgage guarantee scheme?

No buying a home through the mortgage guarantee scheme shouldn’t make a difference to how easy or hard it is to sell.

Will I have difficulty selling my home if it was bought through the equity loan scheme?

No, but don’t forget that you’ll have to pay back your loan, plus a share of the price increase, when you do sell.

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 that 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.

Will my mortgage payments go up after the guarantee scheme ends?

The mortgage guarantee scheme won’t affect your future mortgage rates. If you are worried about this, you can ask if they offer fixed rates.

Your broker or lender has a duty to tell you when your rates will go up.

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

This depends on your individual circumstances.

The two schemes are 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 do I know which lenders are signed up to the mortgage guarantee scheme?

You can find more information about lenders taking part on the Help to Buy website.

How long will the help to buy scheme run for?

The plan was originally to run the scheme until December 2016 with the Bank of England reserving the right to stop the scheme before then. However in the 2014 Budget the chancellor announced an extension to the Help to Buy Equity Loan scheme until 2020.

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