Wednesday, 28 June 2017 09:32

What is Help to Buy and how can it help me onto the property ladder?

Buying property is a major aim of many people but it can be a difficult challenge. This is why it is helpful to get as much assistance as possible and the Government is well aware of the importance of helping people to buy property. This is why there are a number of Help To Buy schemes that can assist people in getting on to the property ladder.

Help to Buy Equity Loan

The Help to Buy Equity Loan scheme sees the Government providing people with 20% of the cost of their newly built home, which means the buyer only has to find a 5% deposit and a 75% mortgage to purchase the property. For the five years of the loan, there will be no interest charged.

For a property that was priced at £210,000; the person would receive a loan of £42,000 which they would pay back with no interest with the remaining £168,000 being split between the mortgage and the cash deposit.

In London, where properties are priced higher, the Help to Buy Equity Loan scheme is available up to a level of 40% as opposed to 20%.

This equity loan is available to all property buyers, first time buyers and people who own or have owned a property.  The price of the home must be no more than £600,000.

Help to Buy ISA

The size of deposit a person has is often a vital factor in obtaining a mortgage or obtaining an affordable mortgage. This is why a scheme that helps people to save for a deposit should be seen as a positive sign, and this is why the Help to Buy ISA is a good thing. The support provides people with the chance to boost their savings by 25%, up to a maximum bonus of £3,000. However, this bonus is per person, not per property, so a couple looking to buy property together can each have their own ISA which means they could receive a bonus of up to £6,000.

The maximum amount of money that can be saved each month is £200 but it is possible to place a lump sum of £1,200 into the ISA account in the initial month. The minimum bonus available to claim is £400, and this means that a savings account must have £1,600 in it to qualify for the bonus. As the maximum bonus is £3,000 per account, the most money you really want to save per account would be £12,000.

To be eligible for the Help to Buy ISA you must be at least 16, be a resident in the UK, have a valid National insurance number and be looking to buy your first property.

The property must have a price of no more than £250,000 (or no more than £450,000 in London), it should be the home you intend to live in and it should be purchased with a mortgage.

One previous Help to Buy scheme that was popular was the Mortgage Guarantee scheme, but this was discontinued on the 31st of December 2016. This scheme was always scheduled to be a short lived one but with many lenders offering 95% mortgages, there is an argument that there is no longer the same need for this scheme.

If you need assistance in buying a home, and most people will benefit from some assistance when buying property, the Help to Buy schemes are worth considering.

Thankfully, our mortgage advisers know everything there is about Help to Buy so why not book a free assessment with him via our website:


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