Last reviewed on 30th June 2021
Government mortgage schemes are designed to help homebuyers by offering affordable rates with very low deposits. Government schemes also support lenders by allowing them to accept mortgages with lower deposits than usual.
There are several mortgage schemes that could help you buy a home and include:
- Help to Buy
- Right to Buy
- Right to Acquire
- Shared ownership
- The mortgage guarantee
There are also shared ownership schemes to help older people and those with disabilities.
Mortgage Update
In the Spring Budget 2021 the government announced the mortgage guarantee scheme, which allows buyers to use a 5% deposit.
Help to Buy: Equity Loan
A Help to Buy: Equity Loan can be used for new build properties with just a 5% deposit.
The government lends you up to 20% of the cost of your new build home. The remaining 75% is mortgaged to make up the balance. If you live in London, you could borrow up to 40% of the overall property value.
There are some caveats to be aware of. For instance, properties bought using the scheme can’t be worth more than £600,000. The 20% you’ve borrowed for the deposit is also only interest-free for the first five years.
This scheme is to be extended until 2023 for first-time buyers only.
Right to buy mortgages
The Right to Buy scheme allows tenants to purchase the council property they’re living in. Tenants may be able to get a discount when purchasing their council home but you must qualify to do so.
The discount available will also depend on the location and type of property you wish to buy. You must have also rented from the local council or housing association for at least three years if you want to use this scheme. Renting from the NHS, armed services or similar trusts may also qualify.
There are similar schemes available in Northern Ireland. Unfortunately, the Right to Buy and Right to Acquire ended for council tenants in January 2019.
Right to Acquire mortgages
If you don’t qualify for the Right to Buy, you could be eligible for the Right to Acquire scheme. The scheme works the exact same as Right to Buy, but discounts are typically smaller.

Shared ownership
Shared ownership allows first-time buyers to purchase a share of a property if they can’t quite afford to purchase 100%. Help to Buy: shared ownership would mean the homeowner would pay their mortgage as well as rent to their housing association.
Once ready, you can purchase a larger share of your property, which is known as ‘staircasing’. You may even be able to buy your property outright if you keep buying more shares over time.
Like most schemes, there are conditions. Your household income must be less than £80,000, or £90,000 in London. This scheme also only applies to first time buyers and those that used to own a home but can’t afford to buy again. Existing owners of shared ownership properties can also use this scheme.
Shared ownership can also be beneficial for those aged 55 or over or those with disabilities.
Should I use a government mortgage scheme?
First-time buyers won’t all need to use a government mortgage scheme to purchase their first property. This is because each mortgage scheme and mortgage product will have some advantages and disadvantages.
The key is to find which mortgage is suitable for you based on your individual circumstances.
Government mortgage schemes are promoted now more than ever. One of the main reasons for the ban on letting agent fees was so that tenants would be able to save more money. Savings can then be used for a mortgage deposit to buy a home.
The government is encouraging tenants to save more money with the aim of generating more homeowners. The coming years will perhaps see an increase in government mortgage schemes entering the market.
About the author
Martin is a senior mortgage advisor and has held a CeMAP qualification for over 15 years while also completing an MBA in Global Banking & Finance.