Many home movers are still unsure or confused about how, or even if, the Help to Buy scheme can help them. To help you understand what is available and whether you qualify for support from the government-backed initiative we've put together a brief guide to the Help to Buy schemes.

What Help to Buy schemes are available?

The Help to Buy home ownership scheme can offer you financial help if you live in England and can't afford to buy a home.

There are four types of Help to Buy scheme:

  • Help to Buy equity loan
  • Shared ownership
  • NewBuy
  • Help to Buy mortgage guarantee

Help to Buy equity loan explained

This type of scheme is available for first-time buyers and home movers buying new homes worth up to £600,000. You cannot sublet your home through this scheme.

If you would like to find out how much your home is worth, to check if you qualify, simply request a free property valuation.

If you use the Help to Buy equity loan scheme you will need to contribute at least 5% of the property price as a deposit. On top of that the government will give you a loan for 20% of the price. You will need a mortgage to cover the remaining cost of the house.

So, if the house you want to buy costs £200,000 you would provide a £10,000 deposit (5%), the equity loan from the government will be for £40,000 (20%) and your mortgage will be £150,000 (75%).

You won't be charged interest on the loan for the first five years of owning your home. From the 6th year onwards you will be charged interest at a rate of 1.75%, increasing every year.

Shared ownership explained

This type of scheme is available through local housing associations. In brief, you buy a share of your home (25% - 75% of its value) and you pay rent on the remaining share. In order to pay for your share of the property you will need to take out a mortgage.

Shared ownership is available if:

  • Your household earns £60,000 a year or less
  • You're a first-time buyer (or you used to own a home but now cannot afford one)
  • You rent council or housing association property

If you're aged 55 or over you can get help from a scheme called 'Older People's Shared Ownership'. It works exactly the same way but you can only buy up to 75% of your home, once you own this amount you won't have to pay rent on the remaining share.

NewBuy explained

This scheme is only available to people buying new builds. If you qualify you can buy a brand new home with a deposit of 5% of the purchase price.

You don't have to be a first-time buyer and there's no income level limit. However, you must be a UK citizen or someone with the right to remain indefinitely in the UK.

Your new home must be:

  • A new build being sold for the first time
  • Priced £500,000 or less
  • Your main home (not a buy-to-let property or a second home)
  • Owned fully by you (cannot be used alongside any other publicly funded mortgage scheme)
  • Built by a builder taking part in the NewBuy scheme

Romans works closely with house builders and developers across Berkshire, Hampshire and Surrey to bring you an abundance of beautiful new homes, including those in the NewBuy scheme. Find out what new homes developments are currently available.

Help to Buy mortgage guarantee explained

This scheme helps you buy a home with a deposit of 5% of the purchase price. The guarantee is made to your provider, not to yourself.

The property can already exist or be a new build. You don't have to be a first-time buyer and there's no limit on your level of income.

To be eligible for a Help to Buy mortgage guarantee, the home you want to buy must:

  • Sell for £600,000 or less
  • Not be a shared ownership or shared equity purchase
  • Be your main home (not a buy-to-let property or a second home)
  • Be owned fully by you (cannot be used alongside any other publicly funded mortgage scheme)

Romans' local mortgage advisers are on hand to provide expert independent advice for all of our clients. If you're looking for more information on any of the Help to Buy schemes, or you have a different mortgage enquiry please visit Romans Mortgage Services.

Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%but a typical fee is 0.3% of the amount borrowed.

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