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Help to Buy mortgage

Last updated on 2nd November 2023 by Martin Alexander

Help to Buy is a government scheme that helps first-time buyers onto the housing ladder. In this guide, we’ll discuss how it all works and how you can apply to use the scheme.

Important: The Help to Buy equity loan ended in England in March 2023.

What is Help to Buy?

Help to Buy allows first-time buyers to buy a new-build home with a 5% deposit. The government then provide an equity loan of up to 20%, meaning you only need a mortgage of 75%. If you live in London, equity loans can reach up to 40%, meaning you only need a mortgage of 55%.

The purpose of the scheme is to allow first-time buyers to:

  • Buy a new-build home with a smaller deposit
  • Get a more affordable mortgage as you’re borrowing less
  • Qualify for better rates as you’re able to use a larger deposit with the equity loan

How does Help to Buy work?

Help to Buy works in the following way:

  • Applicants must have a minimum 5% deposit
  • The government will provide an equity loan of 20%, or 40% if you live in London
  • The property must be a new-build
  • Maximum purchase price of £600,000 in London (and less in the rest of England)
  • The home you’re buying must be the only home you own
  • Can only be used for residential purposes (not sub-let or rented out)
  • You must buy your home from a registered Help to Buy builder

For instance, buying a new-build home for £300,000 would require a 5% deposit (£15,000). The government would then give you an equity loan of 20% (£60,000) to get a mortgage for the remaining 75% (£225,000).

It’s important to note that using the scheme means you’re taking a loan, which must be repaid along with your mortgage. The government loan is interest-free for the first five years. After this, you’re charged 1.75% interest, with the rate increasing each year.

What is a Help to Buy mortgage?

You’ll need a Help to Buy mortgage if you’re buying a home using the Help to Buy scheme. The lender you apply with must also accept the scheme, as not all lenders do. You’ll also need to be eligible for a Help to Buy mortgage.

Mortgage criteria

To get a Help to Buy mortgage, you must meet the following criteria:

  • Be aged 18 or over
  • Be a first-time buyer
  • Have a 5% deposit
  • Have an income to repay the mortgage, as well as the equity loan

How much can I borrow?

What’s the maximum equity loan I can apply for?

The maximum equity you can apply for depends on the location of the home you’re buying. There is also a price cap per region on eligible homes:

Region Equity loan Maximum property value Maximum equity loan Deposit required
London 40% £600,000 £120,000 £30,000
South East 20% £437,600 £87,520 £21,880
South West 20% £349,000 £69,800 £17,450
North East 20% £186,100 £37,220 £9,305
North West 20% £224,400 £44,880 £11,220
Yorkshire and The Humber 20% £228,100 £45,620 £11,405
East Midlands 20% £261,900 £52,380 £13,095
West Midlands 20% £255,600 £51,120 £12,780
East of England 20% £407,400 £81,480 £20,370

Advantages and disadvantages of Help to Buy


  • Help to Buy is a government-backed scheme, making it a secure option to buy a home
  • Buy a home with a smaller deposit, making it easier to save for a mortgage
  • As the government will lend you 20% towards your deposit, you can qualify for better rates, as you only need to borrow 75%
  • All first-time buyers can qualify for an equity loan, irrespective of income
  • Equity loans are interest-free for five years and then start at 1.75%, which is still very low


  • If you don’t pay your equity loan back after six years, rates can start getting expensive
  • Only some lenders offer Help to Buy mortgages, so you’ll be limited in your options
  • You can’t buy any home you want, as it must be a new-build with registered Help to Buy developers
  • New-build homes are typically more expensive than older properties
  • Selling or remortgaging isn’t straightforward, especially if you’ve not repaid your equity loan
  • Buying a home with a 5% deposit is a risk, as you could fall into negative equity if the property value drops

Alternatives to consider

As the Help to Buy scheme is no longer running, you can explore alternatives, which are also government-backed schemes.

Shared Ownership

The shared ownership scheme allows you to buy a share of a home rather than the total value. With the scheme, you can buy between 25%-75% of a home. You’d then pay rent to your housing association on the remainder.

If you’re not buying a new build, shared ownership may be better than an equity loan. You can also keep costs down, as you’ll need a much smaller deposit when buying part of a property.

The shared ownership scheme is open to first-time buyers and home movers. You can buy more shares until you own the property outright.

The Mortgage Guarantee Scheme

The mortgage guarantee scheme allows you to get a mortgage with a 5% deposit. However, it’s different to the equity loan, as the government will guarantee 80% of the mortgage rather than provide a loan. This gives lenders an incentive of security in case the mortgage isn’t repaid.

Again, not all lenders participate in the scheme. However, it’s a government-backed scheme with flexible options.

Speak to a Help to Buy expert

If you’re unsure whether you’ll qualify, you can speak to an advisor for information on the latest government schemes. Our advisors also specialise in various mortgage fields, such as help to buy with bad credit or Right to Acquire if you’re a tenant wanting to buy the home you rent.

Getting a mortgage for a new build is also far from straightforward. With so many options, such as buying off-plan and buyer incentives, it helps to speak to an expert.

Our advisors can also check for alternative schemes to help you purchase a home, as the Help to Buy equity loan is no longer available.

About the author

Martin Alexander
Senior Mortgage Advisor

Martin is a senior mortgage advisor who has held a CeMAP qualification for over 15 years while completing an MBA in Global Banking and Finance.