help to buy scheme

What Is The Help To Buy Scheme?

Availability: England only

Help to Buy: Equity Loan (2021-2023), England.

How Does The Scheme Work?

First-time homebuyers who meet affordability and lending terms can borrow an equity loan of up to 20% (40% in London) of the sale price of a new build home. How much you can spend on your home will depend on which region it is in. North East £186,100; North West 224,400; Yorkshire and the Humber £228,100; East Midlands £261,900; West Midlands £255,600; East of England £407,400; London £600,000; South East £437,600; South West £349,000. You must fund at least 80% (60% in London) of the sale price with a mortgage and at least a 5% deposit.

Pay no interest on the loan for the first 5 years. Interest fees start at 1.75% and rise each year in April by the Consumer Prices Index including owner occupiers’ housing costs (CPIH) plus 2%. You pay a monthly management fee of £1 for the life of the loan. Homes England, the lender, secures the equity loan as a second charge on your Help to Buy home. You must repay the equity loan when you sell the home, pay off your mortgage or reach the end of your loan term. But you can repay all or part (10% at a time, or if you have a 40% loan, 20% or 30%) of the loan any time before then.

Here at Independent Mortgage Brokers, we have helped many eligible mortgage clients secure their dream home using the help to buy scheme. You can also obtain further advice from a solicitor who may be able to help you decide if Help to Buy is right for you.

How To Apply?

At Independent Mortgage Brokers, we can assist with the full Help to Buy application from start to finish, this is separate to your mortgage application and based upon household income. We can check if you meet the affordability criteria and then apply for the equity loan with you. The following steps give you a brief indication of the process.

Step 1 – Reserve a new build property with a homebuilder registered with the scheme

Step 2 – Independent Mortgage brokers will help you apply online through the Help to Buy agent in your region

Step 3 – The Help to Buy agent will assess your eligibility for the scheme and issue an Authority to Proceed

Step 4 – Authority to Proceed allows you to apply for a repayment mortgage and progress your application to exchange of contracts, where the Help to Buy agent will issue an Authority to Exchange

Step 5 – Once all the paperwork and dates are agreed and the home is built (practical completion), the Help to Buy agent will issue a Transaction Confirmation. This allows legal completion and funds to be transferred to the homebuilder.

Step 6 – After legal completion, the Help to Buy agent passes your details to the equity loan administrator to manage the equity loan account until it is paid in full.

Your home may be repossessed if you do not keep up repayments on your mortgage, equity loan or other loans secured against it.

Do You Already have a help to buy loan and want more information of how to redeem it?

Key Points To Remember

The purchase price cannot be more than £600,000

The Help To Buy Scheme is not available on properties over £600,000

From 2021 to 2023 the scheme will be restricted

Restriction to first-time buyers purchasing new build properties.

From 2021 new regional price caps will be introduced

This may reduce the maximum value of homes that can be bought through this equity loan scheme.

If you wish to use Help to Buy you can only take out a repayment mortgage

When A Help To Buy Equity Loan Cannot Be Used

second properties

To purchase a 2nd home or a property you wish to rent out in the UK or anywhere else in the world.

certain marital situations

If you are married and your current mortgage is your sole name, your partner, who is unnamed on the mortgage is unable to purchase another property using Help to Buy.

Part Exchange

If you are part-exchanging your existing property with the new build company.

Let us help and guide you through the help to buy application process

See What Our Clients Say

5/5
We had our hand forced into exploring the possibility of buying a house before we had planned and therefore thought we had little to no chance of getting a mortgage. Lee and Sarah made it possible for us and help us changed our lives. They held our hands throughout the whole process, were very reassuring and and were very quick to respond to queries both from us and the lender.
Karl
Lee made what seemed impossible at the start become a reality, and was so helpful and approachable during the whole process. His knowledge and expertise made us never doubt we would end up with the house we wanted. I have already recommended Lee to several other friends thinking of buying a house. Thank you very much Lee.
Ibi
I’ve not had much experience with the mortgage /remortgage process but after finding lee I can honestly say it is the most easy experience I have had. Lee was polite professional and was on hand all of the way keeping myself and my partner up to date throughout. Lee took care of everything and I could not be anymore happy than I am with the service and support from Lee. I would highly recommend to anyone
Jamie
I can't thank Lee enough for all of his hard work he has put in to sorting my mortgage for me, I had tried to sort a mortgage through lots of other places and had no luck and was ready to give up but thought I would give it one last try through independent mortgage brokers and I'm so glad I did. Lee has done so much more work than I expected and will definitely be going back to him in the future.
Chris Oakham