Property

What is Help to Buy?

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If you’re looking to buy a house & can’t put together the biggest deposit in the world, then the Government Help to Buy Scheme is pretty much perfect for you!

To put it simply, it’s just a loan from the Government to help you buy your first house, or one of those shiny new builds if you already own a house.

For any house under £600,000 you can borrow up to 20% and up to 40% in London. You just need to get together a 5% deposit for the house you want to buy. Which is much better then trying to win the lottery and put down a 25% to 40% deposit.

The great thing about the Help to Buy Loan is that it is interest-free for the first 5 years!

How Help to Buy Works in a Nutshell

  1. You get together a 5% deposit for the new-build or house you want to buy
  2. The Government lends you up to 40% of the house price depending on where you live. 20% for most people, 40% for people looking to buy a house in London.
  3. You find a mortgage to borrow the rest of the money to buy the house
  4. You’ve got 25 years to pay back the Help to Buy Loan
  5. If you sell your house you’ve got to pay back the same percentage of the original Help to Buy Loan. This means that if you’ve taken a loan for 40% and then sell your house after a few years, you’ll have to give the Government back 40% of the sale.

How Much Interest Do You Have To Pay After 5 Years?

With the Help to Buy Scheme you get 5 years of paying no interest on the money you borrowed. But nothing great lasts forever, on year 6 you will be charged 1.75% interest on the money you’ve borrowed. Then it gets even more expensive, the interest you pay rises to match inflation plus 1% each year.

How to Apply for a Help to Buy Loan?

It’s easy to just speak to your local Help to Buy Agent.

What Are The Best Help to Buy Mortgages?

Halifax 2 Year Fixed for First Time Buyers
Maximum LTV
60%
Initial Rate
1.4% fixed until 31 May 2022
Subsequent Rate (SVR)
4.2% variable
Overall Cost
4% APRC

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